Don’t Quit Your Job if You’re Trying to Buy a Home

Your checklist for buying a home is likely longer than your arm, and keeping up with it all can be quite overwhelming. No matter how many items need to be checked off in order for you to become a successful home buyer, one of the very first should be to not quit your job.

Underwriters Frown on It 

While you might only be quitting your current job and starting another in a short amount of time, it’s best that you talk with your loan officer before putting in your notice. The reason for this is your mortgage underwriter likes to see that you have a reliable and stable source of income in order that you can successfully pay your bills...like your home loan. What can be especially damaging is if you want to be a home buyer but quit one job and start another that has an unstable or an unclear income. 

There Could Be a Probationary Period 

When lenders see your future income is shaky, there’s a chance they might put you on a probationary period while they see how much your new income will be and whether you’ll be able to pay off your mortgage. During this probationary period, you could lose the home to another buyer, or the lender may simply back out of the deal if he or she has second thoughts. On a related note, there might also be a probationary period if you switch from working full-time to part-time, which could disqualify you from a loan for which you were once approved.

You Might Increase Your Debt-to-Income Ratio

Something else to think about with being a hopeful home buyer who quits her or his current job for a new one is that you might make a big purchase to celebrate or because you’ll be making more money and can afford said big purchase. Under no circumstances whatsoever, no matter how seemingly great they might be, should you buy a big ticket item on credit, even if you plan on paying it off in full in the coming months. Your credit score might change when you make your purchase, which could require you to resubmit your loan application to your underwriter. Put your focus on your home and hold off on buying new furniture, a new car or anything else. Celebrate your new job with a nice dinner or even by putting the money you would spend on that dinner toward your down payment. 

Do everything you can to better your chances of becoming a home buyer. Don’t quit your job, and don’t forget to keep your agent in the loop.