Probation Mortgage Allows New Workers to Buy a House and Do Well at Work

June 29, 2012 by  Filed under: Loans 

Being under probation may hurt your chances of taking out a loan with most lenders. This is because banks may think of you as a high-risk borrower. You may have an attractive salary but since you are still on a trial period, they may be concerned with whether or not you are going to keep your job long enough to pay off the loan.

Fortunately, there are many lenders who can offer probation mortgage. Not all lenders are going to turn their backs on you. You just have to know which lender offers such loans.

But what is probation anyway and why does it affect someone’s chances of getting a loan?

Being under probation means being on a trial period. This is a practice that is widely used by most companies to monitor the performance of a new employee. This is like being in limbo. A new employee is not offered a full-time position immediately because companies want to be sure that anyone who has just jumped on board has the right skills and fits well.

Being under probation will allow bosses to assess how the new guy does. This will save companies from problems that result from hiring someone full-time and then discovering that the person does not have what it takes to do the job.

It is also beneficial for the employees because they can take this time to see if they like the current job they have. They will be able to assess how happy and content they are in the work they have.

Usually, probationary periods last from 3 to 6 months. There are times when the probation lasts as long as 12 months (usually in government).

The moment the probation ends, the employer will review the person’s performance and then decide whether to extend your probation, terminate, or permanently hire you.

Being under probation can be disadvantageous for borrowers because lenders will think that the borrower runs the risk of defaulting on the loan. This is because it is possible to become unemployed anytime and that would mean the borrower would have no means to repay the loan, which is something they do not want to happen.

Fortunately, not all lenders are very strict with this. Some lenders are willing to offer probation home loans as long as a borrower meets certain requirements. Working with a mortgage broker can be highly beneficial because they can identify which lenders offer this type of loan and help the borrower arrange the documents they need to submit.

So how does one avail of a mortgage while under probation and how much can be borrowed?

With the help of a broker, borrowers need to prove that he or she has:

– Extensive experience (for someone who is switching careers or transferring from another department)

– Worked in the same industry with your previous job

– A probationary period that is no longer than 12 months

It is possible to borrow as much as 90% LVR even under probation. That would require a borrower to have a very strong financial status. It will also call for a very good mortgage broker. A highly skilled broker can negotiate with lenders and prove that his client has the ability to repay the loan despite being under probation.

Some people who have only been on probation for a day or few weeks can also qualify for a probation home loan. It is possible to ask an employer to make an early review to determine the chances of being permanently hired. Similarly, talk to mortgage brokers so they can explain what the possible solutions are.

The possibility of qualifying for a probation mortgage is enticing for a lot of people to continue doing well in their current jobs. The fact that one could take out a loan to buy a house despite being new in the job is something that would drive that person to strive to do well to become permanently employed and have the ability to repay the loan.

I am a specialist in a financial services company. I work with mortgage brokers with a higher level of training and experience than normal mortgage brokers. We are experts in helping good people in tough situations to get approval for their home loan. More info on probation mortgage will help you understand how you can apply and get approved easily.

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