On this article, I will look at the issues of buying a property while in a probation period at work.
You can obtain a mortgage while in a probation period, however, your choice of lenders will be restricted. The compromise you may have to make is to pay a higher rate initially to obtain the borrowing you require but when your product expires you will have more choice when you come to remortgage.
The wording of the employment contract is important as many lenders will write to your employer for confirmation of your job offer and probation period.
Another factor will be your previous employment history. If you are seen moving from a similar job this will strengthen the application.
“Unusually TSB will lend a future job or pay rise as long as it is within 3 months of starting”. This is useful if we need the pay rise to reach the borrowing you require.
Coventry Building Society
If you are currently in a probationary period, you may be considered provided:
- you have previously been employed in a permanent position for a minimum of 6 months and is now moving to a similar job and
- You are not a first-time buyer.
Natwest
Will not lend under probation period.
We were able to overcome this criteria by the client’s employer (Barclays Bank) confirming to Natwest that they were pleased with work performance and were intending to retain our client after the end of the probation period.
Our current 3 favourite lenders are
1. Nationwide
a) Nationwide are prepared to lend against a permanent employment contract, 3 months in advance of start date
b) Probation periods are ignored
c) Only basic salary will be considered.
However Nationwide are currently very conservative on the amount they will lend compared to TSB and Halifax.
2. Halifax
a) Halifax are prepared to lend against a permanent employment contract, 3 months in advance of start date
b) Probation periods are ignored
c) Only basic salary will be considered.
The benefit of the Halifax is that they are one of the last lenders that will advance up to 5 times sole or joint income subject to minimum income requirements, credit score and Loan-to-Value.
3. TSB
This lender has one of the most relaxed criteria for probation.
a) They require no minimum term of employment.
b) If you can evidence you will be starting a new job, receiving a pay rise or undertaking a new role with their current employer within the next 3 months then we can lend against the future income figure.
TSB will seek an employer’s reference and we may also ask for a copy of the contract or pay review letter.
TSB is looking to lend in the region of 4.5 times sole or 4.5 times joint income subject to credit score and underwriting.
As lending criteria changes on a regular basis, please contact us to discuss your individual circumstances
Why Use Neil Soundy Financial Services For Your Mortgage Advice?
- We are experts in SPV / Ltd Co lending.
- Your initial consultation is free with no obligation
How Much Will It Cost Me For Your Advice?
A fee of £495 is payable on completion of the mortgage and Neil Soundy Financial Services Ltd will keep the commission received from the lender for arranging the mortgage.
Neil Soundy Financial Services Ltd is an appointed representative of HL Partnership Ltd which is authorised and regulated by the Financial Services Authority.
We do not give or imply legal or taxation advice. We recommend you contact a solicitor or accountant for advice in these areas.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
