If I start a new job, can you
help me get a loan?
Sometimes the catalyst to buying
your first home or investment
property is when you have found
a stable job with a secure income.
Unfortunately, though you may be
delighted with your exciting new job,
your lender may not be so happy.
In addition, your length of time in a
job will be less of an issue if you have
other sources of income, for example
investments, pensions, royalties etc.
The lender may need proof this income
has been steady for a couple of years
and that you expect it to continue.
When assessing an application for a
mortgage, lenders rely on a stable
employment history with 1 to 2
years of steady or increasing income
to determine the loan amount
you are capable of repaying.
How much can I borrow?
If you meet the criteria you can
borrow up to 90% of the value of the
property you are buying. If you are in
a strong financial position then a 95%
loan may be available. Discounted
professional packages, basic loans
and lines of credit are also available.
Switching jobs shortly before or
after applying for a mortgage
may make it much harder to
qualify
Most banks require you to be in your
current position for a minimum of 6
to 12 months to borrow 80% of the
property value. However there are a
few lenders who allow you to borrow
up to 95% of the value of the property,
even if you have just started a new job.
Are there lenders that can help?
Not all lenders require you to be in your
job for more than a year. In fact, many
lenders now understand that younger
generations are in high demand, are
highly skilled and are career opportunists
who actively change jobs to seek a higher
salary or better working conditions.
Only been in a job for 1 month?
Some banks recognise that despite
a short employment history, many
individuals are in a strong financial
position and have industry experience.
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What if I am changing my career?
If you are considering a career change
or have recently changed jobs, it does
not necessarily mean you need to
put your borrowing plans on hold.
Increase your lending options by talking
to us when you first start thinking
about any life changes and definitely
before making any decisions.
It is best if you contact us prior to
leaving your old job so we can let
you know how this may affect
your ability to borrow money.
Our role as your finance specialist is to
keep up to date with the constantly
changing borrowing criteria of
most lending institutions so we can
assess your individual situation.
We can generally find a lender that
will help, however if you are changing
to a completely new industry or role
then this will certainly reduce your
chances of getting an approval.
What do the banks think?
Most lenders will not approve a loan
during the process of switching to
a new employer. However there are
some major lenders with competitive
interest rates that may consider
approving your home loan before you
have commenced your new role.
Their view is that if you have stability
with your prior employers then it is likely
you are moving to a new employer to
take advantage of a better salary or
working conditions. On the other hand,
if lenders believe you were dismissed
from your last job or let go during your
probationary period they are unlikely to
approve your mortgage application.
How can I get approval?
Depending on the lender, they may
require you to commence the new job
prior to issuing your formal loan approval.
In other cases, if your income from your
existing job is sufficient to repay the loan,
they can approve your loan on that basis.
Why are most lenders so conservative?
Many lenders are very risk averse and
are concerned that if you have not been
in your job for long you have a higher
chance of leaving your job or perhaps
your employment may be terminated
during your probation period.
Again, it is always best to prepare for
the worst and then you are sometimes
pleasantly surprised. Call us BEFORE you
make any decisions, and if this article
has arrived at a time that is too late –
then call us anyway. We are here to help
you with all your finance decisions.
*Disclaimer: This article is generic in nature. All investment decisions should be considered wisely and based on your personal and financial circumstances.
Seek proper advice before committing to any course of investment action. This is not deemed as advice.