How far do mortgage providers dig into the financial stability of your employer ?

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Just wondering how a mortgage provider weighs up your employer and how much emphasis they place on the stability of the employer as opposed to the individual's job security.

I guess historically you'd have thought that working for the Halifax (for instance) was the height of stability, with a "job for life" mentality, whereas a start up company with no real history behind it would seem a far more risky proposition to a lender.

Bring on the 21st century and though an employer credit check would almost certainly show the Halifax as rock solid and the new company as ultra risky due to few or no published accounts, the truth, as we have seen, may well be the complete reverse, where the small employer offers its employees far greater job security than the large institution.

So is the employer risk taken into consideration by mortgage providers or are they all viewed as equally risky ?

opinions4u

I think time employed has a much more significant impact that who the employer is within credit scoring systems.

The "who is the employer?" and "how stable are they?" questions are more likely to be considered completely subjectively on borderline cases. As you rightly point out, HBOS would have been seen as being a pretty stable employer, although the "job for life" mentality is probably 10-20 years behind us. Clearly the events of the Credit Crunch show that "rock solid" employers can collapse and I'm sure that in 2007 most mortgage underwriters would have seen a senior manager in Woolworths as a good risk.

It does work both ways though. I suspect an underwriter being asked to stretch income for a local authority worker with a couple of years service would be a little more cautious to do so than for somebody who is self employed for a decade showing a set of accounts with reduced or nil borrowing combined with year on year net profits increasing and no other negative trends in accounts or balance sheet.

But for most cases, bang in the answers to the questions and let the computer decide is what happens.