How Important is Employment Status in Applying for A Mortgage?
How Important is Employment Status in Applying for a Mortgage?
Hey there! At JKL Real Estate, we know navigating the mortgage application process can be daunting. One of the key factors that lenders consider is your employment status. Let’s break it down to understand just how important it is.
The Bottom Line
“Very Important” is the best answer to this question. Each lender has their own criteria, and each job situation is unique. To get clear guidance, it’s best to talk to a professional mortgage broker.
Today’s Work Environment
The work environment has changed dramatically recently, and lenders are grappling with the instability of many modern employment situations. Your employment status significantly impacts your loan approval chances.
Confirming Your Employment Status
To confirm your employment status, most lenders will contact your employer. You’ll also need to provide proof of employment with several consecutive payslips. As a rule of thumb, the longer you’ve been in the same job, the better.
Employment Types and Lender Preferences
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Full-Time Employment
- This is always the preferred status for lenders. If you’ve been employed for 3-6 months or more in a full-time job, this will be looked upon favourably.
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Permanent Part-Time
- Although not quite as secure as full-time employment, permanent part-time is reasonably accepted by many lenders. The lender will likely check the actual number of hours you work each week.
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Casual Employment
- Generally, lenders shy away from applications from people with casual employment because the income is less certain. However, some mortgage brokers may have home loan options that suit your employment status.
Changing Jobs
Everyone changes jobs from time to time. The key question is whether you’re moving up the stability and income ladder, or down. Lenders will want to examine:
- Your pay structure
- Whether you’re staying in the same industry
- Your experience in the industry
- Your debts and expenses
Seek Professional Advice
Employment status and stability can be complex and aren’t always black and white. That’s why it’s a good idea to talk to a knowledgeable mortgage broker who can guide you through the process.
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