If you find yourself in a situation where you are changing jobs as you are about to get mortgage-approved or are seeking to get mortgage approval in alignment with a new job, don’t hit the panic button yet. Depending on what kind of job move you are making, it could make no difference in the mortgage process. However, there are cases where it will. Keep reading to learn if your situation may be problematic.
Will the Lender Care?
Typically, if you are changing jobs within the same industry and you are getting a raise, then the lenders will not be concerned. Even if you make a lateral move that results in better benefits or more pay is typically viewed favorably by the lender according to the article “How to Get a Mortgage and Change Jobs at the Same Time.” The lenders, however, will want a pay stub after you have worked 30-days at your new job and you will probably have to give them your offer letter so that they can confirm salary and longevity of the position.
Instances that you want to avoid
Situations that can reflect negatively in regards to getting a mortgage include moving into a lateral position for less pay, moving from full-time work to contractor work, or you are making a major career change out of the industry you were previously trained in. These are moves that you would want to make after you have been approved for a mortgage rather than before.
Moreover, another issue that a lender will be concerned with is a large gap in your employment history. But there are two situations within this context that the lender considers a form of employment. This includes military service members returning from deployment or full-time students transitioning into the workforce.
If you find yourself in one of these situations
Taking a new job that is more commissioned based, even if you are making more money, can be problematic. The lender will want to see that this kind of incentive-based income has been received anywhere between 12 to 24 months according to the article “Job Change? You Can Still Get Mortgage-Approved.” The same will apply for contractors who will need to provide proof of income for 12-24 months. As for switching industries, this will not be viewed well by lenders. If you intend to switch, try to ride out where you are until you get approved, then you can make the jump if you so desire.
Any kind of move that will result in more money that is salary based, with better benefits, and is in the same industry is the best situation. If you are taking on less pay, moving into a job that has less guaranteed money, or even in a new industry you haven’t worked in before, getting mortgage-approved will be harder. Regardless of your situation, take these things into consideration and make a plan so that you can avoid having these kinds of job moves affect your ability to buy a home negatively.