How much of an issue is gap in employment?

brazillondon

Hello. I have a question regarding a mortgage application. I have an advisor/broker who helped me and my parter obtain an agreement in principle. Having now had a house offer accepted, we're due to proceed.

The issue is, the rate I've been given is approximately 3.8%. When looking at mortgage comparison sites, for the same details (mortgage term, type, house value, and borrow amount) etc, I'm seeing results as low as 1.99%.

My partner has been in a new role for exactly 3 months now. Before this role, she had been out of work for four 4 months. My advisor notes that we are somewhat limited in the number of lenders who would consider us due to the gap in employment, and the fact that she has been in her role for less than six months.

I'd like your general thoughts: how much of an issue do lenders have with my scenario?

On one hand I'm not wanting to rock the boat at all, and to see this application and house purchase go through. On the other, I’m cautious on blindly accepting the ‘best deal’ he has found - if it could cost us thousands over the next two years. Any comments appreciated.

David_White

Some lenders require continuous employment for at least 12 months, some don't allow probation etc

It's entirely plausible that you aren't eligible for the very top deals because of this.

amnblog

There is no benefit to the broker to put you on a more expensive deal.


If you were eligible for 2% rates he would have put you on one.

Thrugelmir

brazillondon wrote: »

I'd like your general thoughts: how much of an issue do lenders have with my scenario?

Equally I would turn the question around. After 3 months are you sure that this a secure permanent position where your partner is happy to remain for the foreseeable future. As peoples mortgage terms are for 300 months and sometimes longer.

brazillondon

Very much appreciate the responses.

You raise a good question Thrugelmir, I can certainly see why a lender would deem it more of a risk if a borrower has been in their role for only a few months.

Regarding the benefit to the broker - I'd have imagined that the commission lenders pay could vary - which would potentially influence the brokers recommendations.

The mortgage I've been offered includes cashback which helps make up the difference somewhat, but it's still means that extra percent will cost us an extra ~£4000 over two years.

David_White

You are correct that the commission (procuration fee) for each lender tends to vary, however the difference is negligible and I've genuinely never known a broker to pick a lender because of this.

amnblog

Any broker deciding to earn another £50 a case by putting his entire business at risk from the regulator would probably not have the brain to answer your initial phone call to start with.