Can you get a mortgage if you've just been on sabbatical?
Sabbaticals are becoming increasingly more popular as companies look for ways to retain their employees and prevent burnout. According to the Chartered Management Institute, 53% of companies in the UK offer sabbatical leave. But your ability to get a mortgage will most likely depend on the type of sabbatical you’ve taken.
Sabbaticals are typically a perk offered to employees that have been with a company for a set period of time. They can be paid or unpaid. Digital bank Monzo for example offers employees who’ve been with the company for five years, eight weeks of paid sabbatical. They also give employees one month’s unpaid leave every year.
In this case, if you’re going to be taking a month-long unpaid sabbatical but you’re still employed by the company that you work for and are due to return after that period, for a lender it shouldn’t really be a problem. In the case of paid leave, that means you continue receiving an income, so once again, that shouldn’t be a problem. If you’re back from these types of sabbaticals, then you can most likely still get a mortgage.
Basically, for most lenders, if it’s a short break and you have a return to work date, that should be fine. You will probably need to get a letter from your employer that confirms the date you will go back to work and the income that you will be receiving.
However, if you’re taking a much longer break, like a year, and you’re not guaranteed to return to your company, then they will question the gap in your employment history. If you’ve just returned from a long sabbatical, and got a new job, they may also need you to have at least three months’, sometimes up to a year, or even three years, employment history before they consider lending to you.
Of course, lenders consider your full financial situation when it comes to assessing whether you qualify for a mortgage or not. But if you’re thinking about taking a long sabbatical, and have the money to buy and also make the payments for that period of time, it might make sense to apply for a mortgage before you take that break. You might be able to rent out your property during your sabbatical as well to help you cover the mortgage payments.
If you’ve just come back from a sabbatical you won’t be immediately disqualified, but you should speak to a broker to understand what your options are.
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