Real Life Story #2 – New Job
In the past month I have had two customers with new jobs come to me for a pre-approval. One was a teacher, and the other worked as an office administrator. Both had a similar situation with similar fears, which brought me to writing this. Two complete strangers, two completely different careers, both on probation because of new jobs, same question:
“Can I make an offer on a home and get a mortgage even though I am on probation?”
I then asked, “how long have you been at the job so far, and how much time is left on your probationary status?”
First individual: “I have been working for 2 months, and I have a 1 year probation before I know if my position will continue or not”
Second individual: “I start next week…so I have not started and I have a three month probation”
My answer was the same for both, “you definitely can make an offer on a home and still get a great mortgage! Good rate, good product, as long as your credit is good and you have a minimum of 5% down.”
“Whats the catch?”
“Consistency is key and overall strength. Whenever you have not started your job or are brand new with a probationary period we need to bring confidence to the banks.”
For example, if the teacher had been a substitute teacher for 6 months prior to getting the probationary position there is a good chance the banks will see consistency there and will take note that it is a professional position that will always have demand and need. Therefore there is good reasonability that the bank can use the probationary position assuming it will renew as is, or move to permanent. As for the administrative job, the same consistency would be needed. Because the individual has not started even working at new administrative job a letter confirming the guaranteed income would be absolutely necessary along with proof of previous employment in the same industry. If that individual worked as an admin or assistant office manager or a role similar to the new one, that brings confidence to the table. It lets the bank relax a bit knowing that this customer will probably do find considering he or she has done this line of work before. Having good credit and the downpayment from savings rather than gifted, or borrowed will add a lot of strength as well.
In summary, IT IS POSSIBLE! Probation does not have to be a mortgage killer as some may lead you to think. Every bank has their own policies and procedure. Yes, some banks will not allow you to get approved until your probation is complete. But others would do so no problem if it makes sense and we show them the reasons why they should.
Cheers to your new job…and maybe your new home with it! 🙂