All jobs have their expiry dates, but before you decide to change jobs there are a few things you should consider if you’re thinking about getting a loan anytime soon.
The idea of a job for life doesn’t really exist anymore amongst today’s millennials and Gen Y workers. Instead, job hopping is more common, as young empowered millennials are on the hunt for job satisfaction and career advancement, and rightly so, don’t like to settle for anything less. In turn, the national average job tenure is now 3.3 years, across all age groups.
With job-hopping being such a common trend, it is really important to consider how these actions may affect you if you’re thinking about getting a loan with your bank.
How will a new job affect me getting a home loan?
When assessing you and your eligibility for a home loan, the bank will take into consideration:
- How often you change jobs
- If you are staying in the same industry or changing to a completely new industry
- How long you have been in your new job
- What type of contract you are on eg; full time, probation, contract
A lender’s assessment is influenced by these factors, they determine if you are a high credit risk. Even if you are moving to a better job with a higher salary, lenders still view this as a high risk. You may love your new job, but there is a chance it might not work out or be exactly what you initially expected. This would put you at high risk of changing jobs again or having your employment terminated during your probation, potentially affecting your income. It is for this reason that a stable employment history of at least 1 to 2 years is preferred by most lenders to reduce risk and ascertain what loan amount you are able to repay.
Are there any lenders who might be able to help me?
Some lenders understand the characteristics of the younger generation, being career opportunists who commonly change jobs. In fact, some lenders are tailoring their products and changing the assessment criteria to adapt to these new norms. The problem lies in finding the right lender for your financial situation. This is when you need a broker on your side. With access to 30+ lenders and over 3000 loan products, a broker can help you find the right lender for your situation. They commonly deal with difficult situations and will work with you to find a solution.
I need a loan asap, how can I get approval?
Some lenders will not formally approve your loan until you commence the new job. In other cases, they may approve your loan if your income from your existing job is sufficient enough to repay the loan.
Apply for a home loan today!
If you are considering a change in your career direction, speak to us before making any decisions to broaden your lending options. If you’ve already changed jobs and you need to find a lender who will accept your application, contact us to speak to one of our friendly mortgage specialists, at no cost to you.
In most cases we can find you a loan, but if you are entering a completely new industry or job role, this will definitely reduce your likelihood of obtaining approval. This is why you NEED our help.
What should I do now?
TALK TO US! As your finance specialist, our primary goal is to keep you educated with the most current lending criteria and find solutions tailored to your unique situation.
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Disclaimer: The information provided in this article is not legal or financial advice. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this information, you should consider the appropriateness of the recommendations, having regard to your own objectives, financial situation and needs. We encourage you to consult a finance professional before acting on any suggestions provided in this article or on this website.