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Getting a Mortgage With a Gap in Your Employment History

No impact on credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: August 10, 2021

A gap in your employment record, particularly if it’s quite recent, may raise concerns that it could lead to difficulties when applying for a mortgage. But that doesn’t always have to be the case.

Read through our guide to find out whether it’s possible to get a mortgage with a gap in your employment history, how to explain non-continuous employment to a mortgage lender and how this could impact your mortgage application.

Can you get a mortgage with a gap in employment?

Yes, it’s possible. In general, when a mortgage lender reviews an application, what they’re trying to establish above everything else is your ability to make the monthly payments throughout the term of the loan.

Mortgage Lenders really love to see consistency. They’ll likely view someone who has worked for the same employer for, say, ten years as a lower risk than someone who’s recently had a gap in their employment record. But that’s not to say employment gaps will automatically be viewed as a negative in each case.

Every lender has their own internal measures and guidelines they use to assess an application. If you do have one or more gaps in your employment and you’re turned down by one bank, it doesn’t mean that the same will happen elsewhere.

It can prove to be quite tricky trying to establish which banks will look more favourably than others, if gaps in your record exist. This is exactly where having an experienced mortgage broker on your side can be quite crucial. They will already know which lenders in the market tend to be more positive towards such applications, saving you a lot of time, effort and potentially some money too.

What is considered a gap in employment?

A gap in employment is basically any length of time that you’re between jobs. They are usually only detrimental from a mortgage lender’s perspective if they’re frequent, lengthy or unexplained. See the table below for an overview of how severe mortgage lenders typically view employment gaps based on their length.

Length of Employment Gap Severity From a Lender’s Perspective
Less than one month Not severe / usually overlooked
One-to-two months Not severe / usually overlooked
Three-to-four months Moderate severity if unexplained
Five-to-six months Moderate severity if unexplained
Six months plus Potentially severe if unexplained

As you can see from the table, an employment gap of just a few weeks, or even one or two months, are not likely to be too detrimental to an application as long as the rest of the information and employment background is quite robust.

If your current employment record stretches back at least three years, with any gaps showing before this period, it’s possible many lenders won’t even take these gaps into consideration because the consistency they’re looking for is more recent.

It’s completely normal for many of us to have the odd gap in our employment history for a whole host of legitimate reasons, such as:

  • Maternity leave
  • Time off due to an accident, injury or illness
  • Caring for a sick relative
  • Return to study / full-time education
  • One-time opportunity to travel
  • Redundancy

All of the above are life events that are quite common. So, for example, in the case of returning to study, the qualifications you’ve gained could actually make you more sought after by employers and, therefore, give a lender confidence you’ll have a consistent employment record as a result.

How a gap in employment could affect a mortgage application

Some lenders may see a gap in employment as too much of a red flag, depending on the circumstances, and decline the application. That’s the worst-case scenario.

In many other cases, such as the examples given above, a prospective lender will want to dig a little deeper to find out why that gap is there and how it compares with the rest of your employment history before reaching a decision.

When you speak with one of the advisors we work with, they will conduct a full review of your employment history to spot any gaps and find out the reasons why before any lenders do the same. This way you’ll have a stronger chance of getting the mortgage you want.

How do you explain a gap in employment for a mortgage?

The best way to explain any gaps in your employment history is by thoroughly documenting the circumstances of how they happened and including any supporting evidence. As the old scout motto goes, ‘be prepared’.

So, to use the example again of returning to full-time education, providing a copy of any qualifications and certificates you were given once the course was complete would obviously corroborate this. Or, if you were away from work due to injury, any hospital or doctor’s notes outlining what happened.

It would also help your application if you could provide evidence (bank statements etc.) of paying all of your financial commitments during this gap.

In the first instance, it would serve you much better if you sat down with a mortgage broker and explained any gaps in your employment with them, rather than going directly to a lender.

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Gap in employment due to COVID.

As much as lenders like to see consistency, this has been impossible for countless people during the coronavirus crisis. If you’ve had a gap in employment recently due to the COVID pandemic it’s completely understandable to be worried about how this may affect your mortgage application.

If you’ve been furloughed by your employer, there should be no real change because you’re still classed as employed. Despite this, there may be some lenders who would be quite cautious when reviewing your mortgage application.

If you’re self-employed and your business has suffered as a consequence of the pandemic or if you were employed and have been made redundant, these are perfectly legitimate reasons why this gap in your record exists.

The broker we match you with will have a clear understanding of the best lenders to approach in the current climate and can help you document everything in your mortgage application in order to prove your ability to make the monthly mortgage payments.

Get matched with a mortgage expert

If you have any gaps in your employment record and are worried about how this may affect your mortgage application – don’t panic! There are lots of valid scenarios lenders look at each day and it doesn’t necessarily mean it will be rejected.

There are steps you can take; documenting the circumstances surrounding why those gaps are there and provide as much documentary evidence as you can, but we recognise how important it is to seek the guidance of a mortgage broker who has experience of applications showing gaps in employment history, so they will know which lenders to approach and how to do it.

Our unique advisor-matching service is designed to select a professional who understands how to prepare your application and give you the best chance of gaining approval.

Call 0808 189 2301 or make an enquiry and we can arrange a free, no-obligation call with a mortgage specialist today.

FAQs

Do gaps in employment affect joint mortgage applications?

If one of the applicants has gaps in their employment record whereas the other applicant’s employment history is stronger and more consistent, a joint application stands a better chance of getting approval.

What if I’m a contractor with more frequent employment gaps?

Usually contractors are assessed by mortgage lenders as self-employed and their work history will be judged on that basis. There are lenders who will look at applications with regular gaps if evidence of current and previous contracts can be provided.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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