Hip. Tech-savvy. Stylish. Generation Y is known for being on the cutting edge of many aspects of life. This generation, which is generally thought of as being born between about 1978 and 1992, is coming of age with the youngest Gen Y’ers just now finishing up high school. Entertainers, musicians, movie studios and marketing companies all fight hard for that coveted demographic. Generation Y is considered one of the most mobile groups, and one of the groups most prepared to meet the challenges of the future.

Still, Generation Y is falling behind previous generations in one aspect: that of home loans. A recent study by the Loan Market Group discovered that around 10 percent of home loan applications from people in that generation failed to be approved. The reasons weren’t necessarily that they didn’t have the required income or a sufficiently good credit rating. In many cases, they’re losing out on home loans because they fail to pass a job stability test.

It’s common practice for Gen Y’ers to have a high degree of job mobility. Home lenders, however, don’t always approve of this kind of mobility. Lenders look for stable employment histories, often wanting the applicant to have a record of two years or more at the same job. Even jobs in the same field, without a gap of employment, often isn’t enough to qualify a Gen Y’er for a home loan.

This isn’t always a problem, of course. Many lenders will accept changes in employment as long as everything else looks good. The problem is that most people in the Generation Y category don’t have a large down payment to put up, meaning that they need to borrow a significant portion of a property’s purchase price. This means stricter lending practices, and it can also mean additional requirements for home loan insurance.

It’s not impossible for Gen Y’ers to get a home loan, of course. Banks are recognizing that the days when a person would work for the same company for 30 years are long gone. Mobility is the name of the game, especially when it comes to tech-savvy careers like the ones that are often most suited to Gen Y’ers. If home lenders want to continue to do business and have a consistent customer base into the decades to come, they’re going to have to redefine what “job stability” means in terms of getting a home loan.

Photo via striatic