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Securing a mortgage when you've changed job

Questions about getting a mortgage with a new job? Our mortgage advisors are here to help you secure the right product for your needs, whatever your circumstances.

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New Job, New Home: Navigating Mortgages with Confidence

Securing a mortgage is one of the most crucial aspects of any property purchase. However, it can also be one of the most stressful processes—especially if you’ve just changed your job.

Shifting from one job to another can be a nerve-wracking experience in and of it. But when you add in the fact that a mortgage depends on it, well, that can be just terrifying!

So, today, we are here to tell you that there’s nothing to worry about! While changing jobs can affect mortgages, it is still possible to get a mortgage with a new job, despite what you might think.

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Achieving your Buy to Let.

So, are you feeling confident about getting a mortgage with a new job now? We sure hope so! There’s almost no reason why you shouldn’t qualify for a mortgage if you change jobs.

The primary red flags lenders look for are your credit score, DTI ratio, and income history. Yet, as long as you have everything in order, you should be able to get a mortgage without a problem, especially if you leave it to When The Bank Says No to deal with your mortgage application on your behalf.

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How May Switching Jobs Affect My Mortgage Approval?

Before we get into the nitty-gritty details, let’s first explain how mortgages work. Essentially, you’re borrowing money from a lender to purchase property — whether a home or otherwise.

The loan is secured by the property itself. This means that if you fail to pay the money over the designated years, the lender has the right to take the property back.

There are many mortgage providers out there, all of whom share one thing: they want to ensure you can repay the loan and meet the monthly repayments.

Of course, this is where the job change comes into play. There are many reasons why it can be an issue, including the following:

  1. Employment stability: Most, if not all, lenders prefer a client with a stable job history, as that means they have a consistent income stream.
  2. Income stability: Frequently moving from one job to another can give the illusion of an unreliable income, which may turn lenders away.
  3. Unpredictable future: If the change was more of a career shift than a job one, then lenders may think it’s too risky to loan you anything.

Fortunately, despite these issues, it is still possible for you to get a mortgage despite a change of jobs, with the help of a specialist mortgage broker like When the Bank Says No.

How to Secure a Mortgage With a New Job? Part 1

By now, you’re probably wondering how you can still get the mortgage with all the previous barriers. The solution is to follow the tips outlined below:

Time Your Job Change

Though this may be a little late, applying for your mortgage before moving into the new job will make it easier to get approved. But how will this make a difference, you wonder? 

For one, even though you’ll be shifting to another job later on, sticking in one place for long shows two things. One, it states that you’re a reliable worker and that you can hold a job for a long while.

Two, it shows a stable financial and work history. As we mentioned, lenders care about this factor above all else. So as long as you establish a good record, it means you can probably be a stable borrower.

Search Around for Lenders

If you can’t time your job change with the mortgage application, your next step would be to look around for lenders.

The new job can make finding a mortgage lender that suits you challenging, but it won’t make it impossible.

All you need to do is:

  • Go through traditional popular lenders, like banks, credit unions, and online lenders in your area, until you’ve gone through them all.
  • Seek recommendations from friends, family members, or even colleagues. They may be able to help you out with a connection or their personal knowledge.
  • Explore specialist lenders or mortgage brokers as they cater to borrowers with exceptional circumstances.

Going through all this research can be exhausting, but it’s worth it. Every lender has their own set of criteria, which means there’s one out there for you! Better still, save yourself all the legwork and worry and leave it to When the Bank Says No to do the task of finding you a mortgage when you’ve changed job.

Turning Your Nightmares Into Dreams

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When you think you’ve hit that brick wall and have all but given up hope of finding mortgage finance, When the Bank Says No are here to turn your ‘No’ into a ‘Yes’. We have access to a range of specialist lenders who are willing to help those that the High Street banks just won’t touch. Get in touch today and see how we can turn your dreams into a reality.

How to Secure a Mortgage With a New Job? Part 2

Once you’ve found your perfect lender, it’s time to submit all the necessary papers. The primary issue with this step is that missing any document can mean your application will be rejected.

However, there are a few primary documents that you’ll always need to provide, including:

  • Letter of employment (signed and dated)
  • Offer letter from your new job
  • At least three months of bank statements 
  • Details of any outstanding debts
  • Proof of income and tax returns 

Of course, the required papers differ from individual to individual, so make sure to contact the lender for more information. When the Bank Says No will ensure all your paperwork is in order before any mortgage application is made, boosting your chances of a mortgage approval.

Build a Strong Credit Score

Again, what did we say lenders care about? They care about consistency in your financial life! What’s more telling about your economic status than your credit score and debt-to-income ratio?

Those two elements have a significant impact on whether or not you’ll get approved for the loan. That’s because while your new job is a vague indication of your future financial situation, your credit score and DTI are concrete signs of your financial status!

So, to create a strong credit score, make sure you pay all your bills on time. No delays and no missed payments, so you can avoid hurting your credit score.

Another thing you can do is keep your credit utilisation low rate—this is the available credit you’re using. Lastly, when it comes to the DTI ratio, it’ll help if your next job offers better pay or if you can settle some of your existing debts.

Be Transparent

Last, but definitely not least, you must be very sincere with your mortgage lender to secure your loan. This means you’ll need to provide accurate information about your past income, future income, debts, and assets.

Disclose with your lender why you are going through this job change, why the new job is better, and your plans for the future.

Respond promptly to any information requests and keep communication channels open. This way, you’ll make it easier for your lender to understand the situation and improve your chances of getting approved.

Why Would a Lender Reject Me?

Lenders can reject applicants for various reasons, often because the client is deemed too risky. Some of these reasons include the next:

  1. Insufficient Income

Having an insufficient income is one of the first reasons why lenders would reject you. In general, applicants can borrow around four times their annual income. 

This means if you get paid around £50,000, then your maximum mortgage could be £200,000. So, if you’re applying for anything bigger than that, there’s a big chance it’ll get rejected.

  1. Poor Credit History 

Bankruptcies, missed payments, and delayed payments, are all major red flags for all lenders out there. They show on your credit history and make it difficult for you to get approved for anything.

After all, if you can’t handle your financial responsibilities, how can you handle paying a mortgage?

  1. High Debt-To-Income Ratio

Sadly, even if you have a good credit score and a good income that can cover your mortgage, there’s a chance you’ll get rejected because of your DTI.

Basically, your DTI ratio is the percentage of income that you pay for your debts and obligations. If the percentage is higher than 40%, you’re liable for rejection.

  1. Employment Instability

Employment instability doesn’t just mean moving from one job to another. This segment includes frequent job changes, significant gaps in employment history, and unstable income. 

These are all signs that your employment status is uncertain and you’re a risky applicant and might not be able to pay the loan.

  1. Inadequate Deposit

A deposit is essentially a sum of money that reflects your commitment to the loan. It’s the lender’s collateral in case anything goes wrong. 

Placing an inadequate deposit could label you as a risky borrower, hurting your chances of getting the loan.

  1. Discrepancies in the Application

Of all the reasons on this list, this one is the easiest to handle! Loaners primarily look for stable, reliable individuals that can pay off their debts in due time.

But if there’s something wrong with your application, like an address or a contact number that doesn’t match, it’ll raise questions. Worse, the lender can simply choose to reject your application.

So, please keep an eye out for any mistakes in your applications, or better still leave it to us to ensure your mortgage application is all in order before it is submitted .

  1. You’ve Reached the Age Limit

Mostly, mortgage lenders want their clients to pay off their debts by the time they’re around their 60s or 70s.

So, for example, if you’re applying for a mortgage that’ll take 35 years to pay off and you’re already in your 40s, there’s a chance you won’t get approved.

Frequently Asked Questions

How to Improve My Chances of Getting a Mortgage?

If you fear getting rejected or have been rejected by lenders before, there are some things that you can do! For instance:

  1. Work With Your Lender

Remember, when you’re sitting with your mortgage lender, you’re not the only one that wants this to work! Your lender is also trying to win a sale. So, talk about everything that might affect your approval. 

Discuss your financial status, your new job, and even any recent changes in your life. Then, once it’s all out, listen to the lender and their suggestions.

Even if this one doesn’t work for you, the lender may give you a new perspective on handling the situation.

  1. Use a Guarantor

One trick that many people with unstable incomes use is having a guarantor. 

A guarantor is a person who co-signs the applications with you and assures your lender that someone will eventually pay the loan. 

This guarantor can be a close friend, family, or even just a colleague. However, this person must have a steady income and a good credit score.

  1. Reduce Unnecessary Spendings

By now, you should know how your spending habits can affect your mortgage eligibility. Unfortunately, spending without care and not planning ahead can cause you to miss out on the home of your dreams!

Hence, you need to sit down with a notebook and determine your budget, needs, and wants, then turn all this data into a solid spending plan.

The first thing you need to do when you change jobs is to inform your potential lender. After that, your lender will inform you of any necessary changes or procedures that you need to take. 

Chances are, you’ll be asked to provide these papers:

  • Mortgage offer letter
  • Your latest pay stub
  • Proof of employment
  • Reference letter from the previous employer

Please note that you need to be as proactive as possible during this process to ensure everything goes smoothly—any missing paper can cause a serious setback.

Unfortunately, being self-employed or having an irregular income is often a red flag for most lenders. It can make the process challenging but not wholly impossible. 

Here’s what you need to do to ensure you get the loan:

  • First, maintain accurate financial records with well-organised sheets, including your tax returns, profits, and losses.
  • Register as self-employed at gov.uk
  • Pay yourself a consistent salary from your business and pay tax on it
  • Keep your debt-to-income ratio as low as possible

Maintain a strong credit score

Generally, you need at least two years of employment in a job before you can apply for a mortgage. However, this isn’t the only factor lenders consider when determining your eligibility. 

Elements like a low DTI ratio, excellent credit score, steady income, and stable employment history all factor into the equation.

  1. Lenders view clients on a job probationary period almost the same as those with irregular income. That’s because being on probation means you could experience a sudden change, e.g. loss of employment.

    Nonetheless, you can still get a mortgage if you provide all the papers mentioned before and look for a specialist lender willing to help you.

Mortgage approval with a new job is possible.

When the Bank Says No has helped landlords all over the UK purchase their Buy to Let property with a 20% deposit. Whether you’re a first-time landlord with limited funds, or an experienced property investor looking to reserve cash for other purposes, we can help.

Our friendly team will talk through your situation and scour the market for the most suitable mortgage products for your needs. From combing through terms and comparing mortgage rates to ensure you’re getting the right deal, to helping you fine-tune your application, we’ll be there every step of the way.

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