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Securing a new job with good prospects may encourage you to purchase a home. Unfortunately, a mortgage lender may not feel reassured enough to extend an attractive loan package to you. Lenders look for a steady employment record for at least a couple of years before deciding on your capability to pay back a mortgage. You may deliberate on these issues before deciding on a loan request for a home, in the event of a change in your career.
A change of work in the same field as your previous job may make your lender favourably disposed toward you. If your new employers offer a better pay package, most lenders will not hesitate in bringing forward products in the market with low rates and other attractive terms. However, a lender may not exhibit the same level of confidence, if you switch over to a new kind of job altogether. In such a situation, it is advisable to pass a probationary period at your new job before applying for the mortgage process. You may obtain a letter from your employers stating that you have completed the trial period at your new work successfully.
A lender will gauge your new salary to compare it with all the components of the monthly payments including the principal, mortgage interest, mortgage insurance and the property taxes. Most lenders require that the monthly expenditures for mortgage issues are no more than 28% of your pre-tax monthly income. In addition, the mortgage repayments, credit card dues and other debts ought not to exceed 36% of the monthly salary.
Lenders may not hold your new job against your ability of repaying the mortgage debts, if you can show other sources of earnings like pension, investments or freelancing jobs. You must provide documentary evidence of these. Additionally, you must make available proof that you expect the returns to continue for several years.
If your new job or your income does not persuade the lender into granting a mortgage, you may decide to take out a joint mortgage with another borrower with a more satisfactory job situation. You must ascertain if the other individual has a favourable credit report. A lender considers the lower credit score in a joint application for a mortgage.