Mortgages During Probation Period
Applying for a mortgage but still on probation in your new job? Get expert advice from a broker about the potential implications and how to navigate them to secure mortgage approval
Firstly, are you currently in a probationary period?
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In this article, we’ll explain how you can still get a mortgage during your probationary period, how lenders will look at an application and where to look for expert guidance during the process.
In this article:
- Can you get a mortgage in a probationary period?
- Lending criteria for applicants in a new job
- How to get a mortgage in a probationary period
- Lenders and probation periods
- Remortgaging in a probationary period
- Getting a buy-to-let mortgage on probation
- Get matched with a specialist probation mortgage broker
Can you get a mortgage in a probationary period?
Yes, it’s possible and something many consider given a new job can come with a higher salary, which can equate to more affordability and a bigger mortgage. The issue, however, is that many lenders won’t perceive an applicant as being a permanent employee until a probation period is over. This can make getting a mortgage harder.
Why is it difficult?
It raises the question as to how you’ll repay a mortgage should the position not carry on beyond the probationary period. You can usually be let go with a lot less notice during this time; sometimes with none at all. Additionally, there’s the worry that, in the unfortunate event of redundancies, as a new hire, you’d likely be among the first to go.
Combined, these factors present lenders with an extra element of risk that some choose to mitigate by offering less favourable terms and others avoid altogether by not accepting applicants on probation.
Many, however, are open to lending to those on a probationary period as long as you meet their other criteria, can provide an employment contract and share details of your employer for verification. Working with a broker would mean facilitated access to a lender open to mortgage applicants whilst on probation and guidance on what to submit and when.
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Lending criteria for applicants in a new job
Each lender will have a different criteria for people in this type of employment situation but typically they consider:
- The type of job you have: Some positions, such as those in the public sector like teachers, are seen as more reliable by lenders and increase your chances of approval.
- Probation length: This isn’t a major factor but some lenders will view a 3 month probation as less risky as a longer one.
- Time in the job: Some lenders will consider how long you’ve been in this position. If it’s a few months versus a few weeks, it could affect approval.
- Experience in the sector: If your current position is one among similar roles you’ve had in the past and you can produce an employment record that shows commitment to the field, this will speak to your reliability.
Other factors that could strengthen an application
- A good deposit: Some accept as low as a 5% deposit but a bigger deposit, think closer to 25%, can counter some of the financial insecurity lenders are worried about with an applicant on probation.
- Good credit history: This speaks to how likely it is that you’ll be able to repay the loan. Should you have bad credit, talk to a broker about ways to remedy this and how to access bad credit specialist lenders while on probation.
- Little debt: Lenders are perfectly fine with you having debt as long as it’s well-managed. Taking out a lot of debt at one time - stretching your affordability - or just generally having a lot of it will raise concerns.
- Purchasing a standard property: A property considered non-standard adds to the perception of insecurity so opting for a property made of standard materials – not timber or concrete – will be more beneficial to your application.
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Lenders and probation periods
Some lenders, such as Together, Pepper Money, and Precise Mortgages, will issue an instant no to a mortgage applicant on probation, but plenty of high street lenders, such as Virgin Money, Nationwide, Halifax, Barclays, and TSB, as well as specialist lenders, such as the Teachers Building Society, are happy to generally ignore probation periods.
Others may also accept probation period applicants but have caveats. Vernon Building Society, for example, won’t allow the process to go to completion until the probationary period is completed unless applicants have a history of working in the same field. Aldermore won’t accept clients working in entertainment, leisure, travel and hospitality. Tipton Building Society may require a minimum period of employment if the new job is in a new sector.
It’s worth noting that most lenders won’t consider any earnings you may make outside of your wage as they would for an applicant not on probation when considering how much you can lend. So if you receive bonuses, commissions, or money for overtime, that wouldn’t be counted.
A broker would be able to share which type of lender might be right for you and can provide exclusive access to those specialist ones who won’t work directly with applicants.
How to get a mortgage in a probationary period
Being on a probation period is an added complication to any mortgage application but following these steps could help.
Step 1: Reach out to a broker experienced in these cases.
They can take a look at your full financial picture and advise on whether waiting until the probationary period is over would be best or if that’s not an option, how to strengthen your application so that being on probation is less of a concern. This will help in avoiding a rejection and subsequent black mark on your credit history.
Step 2: Build an application.
To remedy the risk your probation period presents, you’ll need to compile additional paperwork that speaks to your reliability and ability to meet mortgage repayments. That could include payslips from a previous job in a similar sector, a letter from your current employer, or your current contract.
Step 3: Submit it to a specific lender.
Applying blindly to any lender could waste time and lead to a rejection. To avoid that, it’s important to do the research and apply only to a lender you know is likely to say yes. A broker can save you that time by recommending which, from their experience, they believe will offer you the most competitive deal.
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Remortgaging in a probationary period
If you already own your home but wish to remortgage when you’re in a probationary period at a new job, this could be an option. The first step would be to check with your current lender to see if this is something they’d consider and what that would mean for your mortgage. A broker would then be able to advise on whether another lender might have a better deal for you while also talking you through the nuances that come with remortgaging under these circumstances. It could be that a new lender may not be willing to loan you as much as your current mortgage or that you’ll have difficulty in meeting the application criteria given your shift in working status.
Getting a buy-to-let mortgage on probation
Just like with a residential mortgage, it is possible to get property you plan to rent while on probation but that selection of lenders will be smaller because your new job status makes your income less secure. An expert would be able to share which buy-to-let lenders are open to probationary period applicants.
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Get matched with a specialist probation mortgage broker
Getting a mortgage right after a job move and when probation still hangs over you is one of those circumstances in which expert help is almost vital. Without it, the chances of getting a good deal are significantly reduced. But rather than just any broker, it’s best you be matched to one with specific experience in obtaining mortgages for those on probation. This is where our broker matching service comes in.
By calling 0808 189 2301 or filling out this enquiry form, you can be quickly connected to a specialist broker for a free consultation. They’ll be able to ensure applying for a mortgage during this time is right for you and help you submit as strong an application as you can.
Speak to an expert on probationary period mortgages
Increase your chances of approval with a specialist
This will be dependent on the lender. For some being a first-time buyer won’t make a difference but for others it could be. A broker would know which lenders are likely to accept applicants buying a home for the first time whilst on probation in a new job.
The benefit of waiting is that you’ll have a larger pool of lenders willing to consider your application, which could mean you’ll qualify for a better interest rate.
The downside is that you could miss out on the property you really want if you delay placing an offer.
Most mortgage lenders prefer to see your last 3 payslips as evidence of earnings. However, it’s possible you might not have that many from your new employer if you’re in your probation period. If this is the case a copy of your new contract confirming your salary should be sufficient.
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