Congratulations on your new job! As you settle in and start planning your future, buying a home might be at the forefront of your mind. But what if your employment is still within a probationary period? Can you get a mortgage while on probation?
In this article, we’ll explore the possibilities of securing a mortgage while on probation, the challenges you might face, and strategies to increase your chances of success!
Can you get a mortgage while you’re on probation at work?
The short answer is yes, it is possible to get a mortgage while on probation. However, it can be more challenging compared to being in a permanent position. The average probationary period in the UK is three months, with some extending to six months and during this time, some lenders might see your income as less secure, making them more cautious about approving a mortgage.
Why is it harder to get a mortgage while in your probationary period? The challenges of getting a mortgage during probation.
There are a few different factors that contribute to the difficulty of getting a mortgage on probation:
Unproven employment
Lenders assess your ability to repay the mortgage based on your income stability. Probationary periods introduce an element of uncertainty because your employer can still terminate your employment without notice.
Limited payslips
Most lenders require at least three months of payslips to verify your income. With a shorter probationary period, you may not have accumulated the necessary documentation to apply for a mortgage
Stricter affordability criteria
When you’re on probation, lenders might apply stricter affordability checks. This means they might only approve a smaller mortgage compared to what you might qualify for with a permanent position.
How long do you have to be employed to get a mortgage?
There’s no set minimum employment length required for a mortgage. However, lenders generally prefer if you can demonstrate a stable employment history. Ideally, being in your new role for at least six months, with your probation period successfully completed, strengthens your application.
How many months’ payslips are required when applying for a mortgage?
While there’s no universally mandated number, most lenders request at least three months of recent payslips to verify your income. This allows them to assess your income consistency and calculate your average monthly earnings.
Here’s where things can get tricky during probation. If your probationary period is three months, you might not have the required payslips. Some lenders might be flexible and consider additional evidence like your employment contract or a letter confirming your probationary period and intended end date.
How to get a mortgage in a probationary period:
While securing a mortgage on probation requires more effort, it’s not impossible. Here are some steps to increase your chances of success:
Strengthen your financial profile
Improve your credit score: A strong credit score demonstrates responsible financial management and increases your attractiveness to lenders. You can check your credit report for free and take steps to improve it before applying for a mortgage. This might involve paying off outstanding debts or correcting any errors on your report.
Save a larger deposit: A bigger deposit (ideally 20% or more) lowers the loan amount you need to borrow, making you a less risky borrower in the eyes of lenders. Saving a larger deposit shows lenders you’re financially responsible and committed to your homeownership goals.
Seek professional guidance
Speak to a mortgage broker: A good mortgage broker, like the ones at Key Solutions, will specialise in navigating complex mortgage applications. We can assess your situation, recommend lenders who are more flexible with probationary periods, and guide you through the process. A broker’s expertise can be invaluable in finding the right mortgage product and navigating the application process, so get in touch with us today!
Prepare a strong application
Gather supporting documentation: Gather documentation that strengthens your application, such as your employment contract, a letter from your employer confirming your probationary period and intended end date, and evidence of any other income sources (e.g., bonuses, side hustles). Providing this documentation helps address the lender’s concerns about your employment status and demonstrates your overall financial picture.
Consider a guarantor mortgage: If you have a close relative with a strong financial position, they might be willing to act as a guarantor. This provides additional security for the lender and can improve your chances of approval. A guarantor essentially acts as a safety net, assuring the lender that the mortgage will be repaid even if you cannot meet your obligations.
Getting a mortgage on probation requires careful planning and strategising. By focusing on improving your credit score, saving a larger deposit, and seeking guidance from a mortgage broker, you can increase your chances of securing a mortgage and achieving your homeownership dreams.
Ready to discuss your mortgage options while on probation? Contact Key Solutions Mortgages today! Our experienced brokers will work tirelessly to find the best mortgage solution for your unique circumstances.