Is It Smart to Buy a House When Moving Jobs?

Buying a new home can be quite exciting. It is a new journey and a big achievement for an individual or a growing family. However, as you build a home and build a career that will help you sustain the lifestyle that you desire, changing jobs might be inevitable.

But what if you are buying a home and changing jobs at the same time? Will you qualify for a mortgage? Would it be extra difficult for you to secure your new home while you transition from one job to another? How about buying a new home far from where you work? Will it be an issue in the home loan application process? Elizabeth Fenderson Real Estate gives you answers to these questions.

Does Changing My Job Affect My Home Loan Application?

In general, changing jobs can affect your loan approval. When acquiring a home loan, the lender will always look into your income and your capacity to repay a home loan. The job that you have and the amount of money you make are essential in determining your ability to make your payments. Any change in your job can significantly influence your ability to purchase a home.

Take note that lenders will always review your company's stability, your recent increases in pay, your work history as well as other qualifications that go with your salary. Your income and employment history are keen in getting the approval of lenders who you are applying for a home loan.

Although new employment opportunities can be beneficial in securing the income that you need to buy a home, lenders will not always see this. Even when you are in the last stages of your home loan approval, you should be very cautious about changing jobs. Lenders usually do a final check to confirm your employment and income. They need to be certain that everything remained the same since the first loan approval.

Can You Change Jobs While Buying a Home?

Employment opportunities are not always certain. They can come during a time when you least expect it. New and better employment opportunities may come along while you are in the process of buying a new home.

If you are in this situation, it would be best to advise your lender as soon as possible. If you are leaving a job for a new one with the same structured pay or if you earn hourly as a salaried employee with no additional income from commissions or bonuses, you may not have any home buying challenges as long as the new employer you are moving into has the same stability as your former employer. Such changes will most likely have no impact on your mortgage application.

Negative Impacts of a Job Change When Buying a New Home

Although it is very unusual to change from a high-paying job to a lower paying job, this could happen, irrespective of the line of work that you are in. If your change of job caused you to have a lower income than your previous one, this will have an adverse effect on the possibilities of getting your loan approved. Your income's current status is deemed as a sign of stability or instability on your end.

Additionally, changing your job to a completely different industry or line of work can also cause some difficulties in obtaining a mortgage. Ideally, you need to have two years of working experience in an industry under the same or relevant field to be able to be considered for a mortgage. If you are a chemist who suddenly enters building homes, it might be tricky to get lender approval on your loan.

So is Buying a Home When Changing Jobs a Smart Move?

If possible, it would be best not to change jobs during or before applying for a home loan. Having a stable income to present to your lenders increases the chances of getting your mortgage approved. However, if your income is stable even when switching jobs, you may be able to get approved for a mortgage. The bottom line remains to be that purchasing a home requires income stability on your end to qualify for a home loan.