September 25, 2017
People change jobs and careers frequently nowadays, so can it affect your chance of buying a house?
Statistics show that the national average of time spent in a job is 3.3 years across all age groups. This is a far cry from year past when people held the same job for their entire career.
With this in mind, it is important to consider lenders' criteria if you are applying for a mortgage and what the impact will be if you have recently changed employers.
How does a new job impact my home loan application?
For all home loan applications, but especially for younger applicants, a stable job can be very important when your application is being assessed by a bank or lender who you're looking for a home loan with.
Lenders look for secure incomes and stability when assessing on your borrowing capacity. Looking at how often you change jobs, your time in each role you've held, whether or not you are changing industries with each job, and if your move was taking your career in a new direction are things that lenders pay a lot of attention to.
You may love your new job, but your bank might not feel quite as excited.
How long do I need to be in my current role to get a mortgage?
While the majority of lenders will look at your last two years of employment, it's not always necessary for you to be in the same role for this amount of time. Lenders will be looking for steady or increasing income during this period.
Many lenders require you to be in a job for a minimum of 6 months and at least 12 months for any roles that are casual employment. Although there are lenders who will approve your loan even if you have just started a new role, however you will likely require proof that you have experience within your industry for this to work in your favour.
What if I change my career?
Changing your career path or changing employers for the same career does not necessarily mean your home loan application will be rejected.
The majority of lenders understand that a number of employees within today's job market are highly skilled, and therefore are in high demand. They understand that people are constantly looking for opportunities to further their career. Many employer changes come about due to higher salary or better working conditions being sought, and this is quite common-place.
Length of time in a role can also be less of an issue when the applicant has other forms of income that are expected to continue for the foreseeable future. Income sources could be from investments or a secondary jobs.
What else do I need to consider?
A great way to avoid challenges when applying for a mortgage is to ensure the rest of your application is strong, so that your employment period isn't as much of an issue for assessors. The savings you have, the assets you hold, the credit limit of your liabilities and your general living expenses are all some of the factors that lenders look at when assessing your application.
What should I do now?
Give us a call! The team here at Mortgage Choice in Kingscliff would love to help you achieve your goals. Book an appointment with us today to discuss your options and get you on your way to owning your home.
Call Jo Croft and her team today on 0425 293 453 or simply click on the Book Now button to make an online booking.