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Qualify for a Mortgage While on Probation at Your Job in Canada

Qualify for a Mortgage While on Probation at Your Job in Canada

If you’ve only recently started working for a company, you’ll need to show that any probationary period has been completed. Although they are normally three to six months long, probationary periods can be longer. The lender will want to confirm that you are not currently on probation because during this time, an employer has the right to fire you without explanation. If you don’t pass your initial evaluation, the lender doesn’t have a lot of confidence in you.

Now, the state of your probation is being examined here, not the amount of time you have been with the employer, which is why it is easy to move around any qualms your lender might have.

Can I Get a Mortgage on Probation Period 

While some mortgage companies would refuse to work with clients who are on probation, others are more accommodating, pointing out that a contract should be sufficient proof that your employment is long-term.

 

Qualify for a Mortgage While on Probation at Your Job in Canada

 

Although your contract type and even its wording will be taken into account by lenders. It’s important to note that most lenders will contact your employer as part of reviewing your mortgage application to check the duration of your work probation and confirmation of your job offer.

This is relevant even if you have only recently started in the position, and it will be crucial to getting your application accepted.

It’s also important to keep in mind that while you are still in your probationary term, the majority of underwriters will not take any variable compensation components—such as commission—beyond your base pay into account. A good place to start is to make an inquiry with a whole-of-market broker, like the ones we work with, as doing so will guarantee that you receive the appropriate guidance.

However, there are a few factors to think about first that could impact your odds of success.

Mortgage lenders frequently demand a minimum of 12 months of job experience in the same field. This is to persuade them that, in the unlikely event that you fail your probationary period, you have enough industry experience to find another employment swiftly. There are a select few lenders who may not even require this.

This practice of taking employment history into account before lending also applies to minor “loans” like bank overdrafts.

Learn How to consolidate your debt into mortgage?

Why is Getting a Mortgage on Probation Harder?

Whether they should or not, mortgage lenders view borrowers on probation as being riskier. Their opinion is that they may need to take into account the possibility that you won’t make it through probation to be hired permanently in the position and that younger employees are more likely to be let go if the business experiences financial difficulties.

Depending on the lender, those in new positions might not be able to give proof to meet more specific requirements. Paystubs are typically required by lenders as part of a mortgage application as documentation of your earnings over a specific period.

Without the proper guidance, it might be challenging to identify your possibilities given how frequently requirements change.

Does Your Type of Job Affect Your Mortgage? 

Applications filed during probation are frequently given varied considerations depending on the position you hold, e.g., applications from public sector employees, such teachers and doctors, and/or from industries where changing contracts are common, may have a stronger chance of success.

Because the strength of your application will be determined by the circumstances, contact us so we can connect you with one of the many experienced Langley mortgage brokers we work with, who will walk you through the process step by step.

Get Help: Self Employed Mortgage

Does the Probation Period Length Affect Your Mortgage? 

Contrary to popular belief, the length of your probation period does not significantly impair your ability to obtain a mortgage, however, lenders may still take it into account.

For instance, some lenders might accept your loan application but decide to hold off on paying you until your probationary term is through. They believe that this reduces your chance of not being made permanent, but this could become a problem if your probation lasts longer than the amount of time you are willing to wait to secure financing for a home purchase.

In contrast, some lenders offer mortgages regardless of the duration or stage of your probation at the time of application. This is because the average worker has a six-month probationary period when starting a new job.

This is because most lenders analyze your employment history to decide whether or not to provide you a loan. You have a better chance of meeting their standards for a mortgage while on job probation if you had experience in a similar position in the past or can provide evidence of a history of consistent income from prior employment.

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