mortgage simple definition: Getting a Mortgage With a New Job

Getting a Mortgage With a New Job

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Getting a Mortgage With a New Job video duration 3 Minute(s) 51 Second(s), published by Mortgage Broker Brisbane - Hunter Galloway on 21 09 2019 - 05:00:06.

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In the Australian mortgage market, the majority of lenders prefer borrowers who have been employed for a long period, as it shows they have a reliable, and stable, source of income. But that will not work for all borrowers as job hopping is becoming more and more common, particularly among the young, empowered Gen Y workers – also known as millennials – on the lookout for job satisfaction and career advancement.

With job hopping becoming more of an established trend than in decades past, it is crucial to understand how your career decisions might affect your ability to qualify for a mortgage, as well as what you can do to enhance your success rate.

How will a new job affect your ability to get a mortgage?
When assessing your eligibility for a home loan, lenders will take the following into consideration:

How long have you been in your new job?
How often do you change jobs?
How long have you been in your current field or industry?
Are you staying in the same industry or moving to a completely new industry?
What is the likelihood of borrowers in your industry defaulting on repayments?
What are your employment terms? (full-time, part-time, casual)
These factors influence a lender’s assessment of whether you are a risk, in terms of being a borrower. Even if you are moving to a job with a higher salary, lenders will still view this as a high risk. And even if you love your new job, there is a chance that it will not work out or be exactly what you initially expected. In other words, you may find yourself changing jobs again or having your employment terminated during your probation, which can affect your income. That is why most lenders prefer a stable employment history of at least one to two years.

Are there lenders who consider borrowers with a new job?
The good news is that not all lenders require borrowers to be more than a year in a job. In fact, many lenders understand that younger workers are in high demand, highly skilled and career opportunists who actively change jobs to seek better compensation or working conditions. They recognise that despite a short employment history, many individuals are in a strong financial position and have industry experience.

But it also depends on your circumstances. If you are an experienced professional with other sources of income, a strong asset portfolio, few liabilities, a strong credit score, high genuine savings and a stable employment history as far as many years of experience in your given field, lenders are more likely to make an exception to their lending criteria and grant you a home loan. If you are not an experienced professional, it is still possible for you to get a home loan. However, your choice of lenders may be limited, which can mean you may have to settle for a less competitive product.

Do lenders favour certain lines of work?
Major banks and other lenders usually prefer the following:

Nurses
Teachers
Medical professionals
Government employees
Mining industry professionals
Any other line of work which is in high demand
But what if you are a blue collar worker? Do not worry. In most cases, you can still qualify for a mortgage.

What if you are changing jobs?
Most lenders will not approve a loan for you while you are in the process of transitioning to your new job. However, there are a few major lenders with competitive interest rates who will consider approving your loan before you commence your new role.