New Job? On Probation? How Realtors Can Still Get Their Clients Mortgage-Approved
One of the most frustrating situations for a realtor: your client is under contract but just started a new job. Banks say no — but that doesn't have to be the end. Scott Dillingham explains how to find the right lender…
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Show notes
One of the most frustrating situations for a realtor: your client is under contract but just started a new job. Banks say no — but that doesn't have to be the end. Scott Dillingham explains how to find the right lender for clients on probation or with less than one year at their job.
Scott explains that while many major banks require at least one year of employment history, this requirement is not universal across all mortgage providers. When clients receive a decline from their bank due to probationary status or limited job tenure, it should immediately signal an opportunity to work with a mortgage broker who has access to more flexible lending options. The key distinction Scott makes is between clients who simply have a new position versus those with inconsistent employment patterns jumping between roles every few months.
For borrowers on probation, Scott shares that numerous A-lenders will approve mortgage applications regardless of probationary status. This flexibility proves especially valuable for individuals relocating for work, changing careers for better opportunities, or starting positions in new employment categories. The approval process works through CMHC-insured products as well as alternative and private lending channels, giving mortgage professionals multiple pathways to find solutions for their clients.
Scott highlights the role of monoline lenders in providing these flexible mortgage solutions. Unlike traditional banks that offer multiple financial products, monoline lenders focus exclusively on mortgage lending. This specialization allows them to develop more nuanced underwriting guidelines and take a closer look at each application rather than applying rigid policies. Their reduced overhead costs from operating without physical branches also translates to competitive rates for borrowers.
The episode emphasizes the importance of mortgage professionals understanding that each client file requires individual assessment. While Scott maintains realistic expectations about approval possibilities, he encourages agents and brokers to explore all available options before telling clients they cannot qualify. Working with the right lending partners can transform what appears to be an impossible situation into a successful mortgage approval.
Key Takeaways
- Traditional banks often require one year of job tenure, but many monoline lenders and alternative providers will approve mortgages with less employment history
- Probationary status does not automatically disqualify borrowers when working with lenders who have flexible employment guidelines
- Inconsistent job history with frequent position changes creates approval challenges, while a single recent job change typically does not
- CMHC-insured mortgages, alternative lenders, and private lending all offer pathways for probationary borrowers
- Monoline lenders specialize exclusively in mortgage products and often provide more flexible underwriting than traditional banks
- Mortgage brokers should assess each client situation individually rather than applying blanket rules about employment requirements
- Clients relocating for new positions or advancing their careers benefit most from understanding these flexible lending options
Links to Show References
- LendCity Mortgages: lendcity.ca
- Contact Scott Dillingham: scott@lendcity.ca
- CMHC Self-Employed and Flexible Programs: cmhc-schl.gc.ca
- (00:00) - - Introduction to Probation and Employment Challenges in Mortgage Lending
- (00:30) - - Why Banks Decline Clients With Less Than One Year Employment
- (01:15) - - When to Refer Clients to a Mortgage Broker for Flexible Solutions
- (01:45) - - Understanding the Difference Between New Employment and Inconsistent Job History
- (02:00) - - How Probation Mortgages Work With A-Lenders
- (02:25) - - What Are Monoline Lenders and Why They Offer More Flexibility
- (02:55) - - Closing Remarks and Call to Action
Realtor questions from this episode
Can a client with less than a year at their job get a mortgage?
Scott says many banks require one year, but that requirement is not universal. When a bank declines a client for not being at their job long enough, he says that is the cue to bring the file to LendCity, which has lenders that can move forward without it.
Can a client still on probation be approved?
Yes, depending on the file. Scott says many lenders will move forward even if the client is on probation, and that lenders supporting this include CMHC-insured options, alternative lenders and private lenders. He recommends discussing each case because he does not want to promise there will be no problems.
What kind of job history is a problem?
An inconsistent history, such as someone who works two months here, five months there and nine months somewhere else. Scott says lenders will not help if the client cannot hold a job.
Transcript
Transcript of the episode as recorded. Rates, fees and program details are as stated on the recording date and may have changed.
Welcome to the Close More Deals podcast.
Welcome to the Close More Deals podcast. I'm your host, Scott Dillingham. Today, I'm gonna be talking to you about probation. We hear it a lot where a client will go and they'll get preapproved and the lender says, no, you're on probation or you haven't been in your job long enough. And then the clients come to us and we get them approved. There's no secret, it's just that every lender has their own policies as to what they support and what they don't support.
So there's a couple things and I'll be diving into it today, so you can understand how the program works. So first off, there is, when we're talking about no probation, but you've only been at your job for less than a year. A lot of banks require that one year. So if your client is going to them, right, and they're hearing, you you're declined, you haven't been at your job long enough, right away it should trigger, okay, let's get them to Scott at LendCity, let's do this because he's got the lenders that can move forward without this.
So just know that that is the thing. Now, know, pros and cons here and caveats, I wanna give you all the details so you have it all. If this is somebody that works two months here, two months there, five months there, nine months, two months again, right? And we're just seeing an inconsistent job, like they can't hold a job, then that's a problem, right? The lenders, they're not gonna help with that, but if that's not the case, then yes, we've got the lenders.
And now we'll talk about probation. So depending on the client's file, we have many lenders that even if you are on probation, they'll move forward and they don't care. Now, is fantastic because everyone, usually I'm gonna say nine and a half out of 10, because I do see some roles at different jobs, where it's high profile and you're being recruited, where they don't have any probation in it at all. So I have seen some of those, but it's rare. But anyways, if you've got the probation, it's not a problem depending on the lenders.
So we use this program a lot, especially somebody moving from one town…
So we use this program a lot, especially somebody moving from one town to another town or somebody who feels like, you know, this new employer or new job or career category, right, maybe it's a completely different employment than what they've had before, where that they feel like they can get more, they move forward and they're on probation. So let us know, talk to us about it because each case is unique and I don't wanna promise you that yeah, this is no problem and then there is problems.
So let's discuss it, but just to know that you can do probation, the lenders that support the probation, we have them with CMHC and the alternative lenders and obviously private lenders. So we have it across the board, these are A lenders I'm referring to, They're not banks, but they're called monoline lenders, and a monoline lender is just just a lender, just a mortgage lender. They don't sell the banking products, they've just have the mortgage balance, that's it, and they're more flexible on their rules because they kinda have to be if they wanna grow.
Right? They only sell mortgages. So that's how it works high level. I hope this episode added value and it will help you to close more deals. Please share this with your other REALTOR® friends if you found value and looking forward to seeing you next week.