Can I Change Jobs While Buying A Home?

Securing a home loan while contemplating a career move can feel like walking a tightrope. Many prospective homebuyers find themselves in this situation, wondering if accepting a new job offer could derail their dreams of homeownership.

At Original Wealth, we’ve guided numerous clients through this complex scenario, and we’re here to share our expertise on managing job changes during the home buying process.

How Employment Affects Your Mortgage Application

Your employment history plays a crucial role in the mortgage approval process. Lenders carefully examine your work background to assess your ability to repay the loan. They typically look for:

• A stable employment history (usually two years or more)
• Consistent or increasing income levels
• Clear career progression
• Regular pay frequency

Key Employment Factors Lenders Consider

When evaluating your application, lenders focus on three primary aspects of your employment:

1. Income Stability

Your regular income serves as the foundation for loan approval. Lenders calculate your debt-to-income ratio to determine how much you can borrow and whether you can comfortably manage monthly payments.

2. Employment Type

Different employment arrangements carry varying levels of risk from a lender’s perspective:

• Full-time permanent positions are typically viewed most favorably
• Contract roles may require additional documentation
• Self-employed applicants often need more extensive proof of income
• Commission-based positions usually require a longer track record

3. Industry and Role

Career changes within the same industry are generally viewed more favorably than complete career shifts. For example, moving from one accounting firm to another poses less risk than switching from accounting to a completely different field.

When Is It Safe to Change Jobs During the Home Buying Process?

Timing is everything when it comes to job changes during your home buying journey. Here’s a detailed breakdown of more favorable and less favorable scenarios:

More Favorable Situations:

• Moving to a higher-paying position within your field
• Receiving a promotion with your current employer
• Transitioning from a contract to a permanent role
• Accepting a position with better long-term prospects in the same industry

Less Favorable Timing:

• During the final stages of loan approval
• Before meeting the minimum employment requirements
• When switching to a completely different industry
• If the new position has a lower base salary

Potential Risks and Challenges

Understanding the potential hurdles can help you make informed decisions about job changes during the home buying process. Some key considerations include:

Loan Approval Impact

A job change might require your loan application to be reassessed, potentially leading to:

• Delays in processing
• Additional documentation requirements
• New income verification procedures
• Possible changes to loan terms

Probationary Periods

Most new positions come with a probationary period, which can affect your loan application. Lenders may:

• Request a letter from your new employer confirming your position
• Require completion of the probationary period before approval
• Need evidence of your experience in the role or industry
• Ask for additional financial security

How to Navigate a Job Change During the Home Buying Process

If you’re considering a job change while buying a home, follow these essential steps:

1. Communication is Key

Keep open lines of communication with your mortgage broker. At Original Wealth, we recommend informing your broker about:

• Any potential job changes on the horizon
• Changes to your income structure
• New employment contracts or offers
• Start dates and probationary periods

2. Documentation Preparation

Gather and maintain comprehensive documentation, including:

• Letter of offer from your new employer
• Recent pay slips from your current position
• Employment contract details
• Evidence of your experience and qualifications
• Bank statements showing savings history

3. Timeline Management

Work with your mortgage broker to create a strategic timeline that accounts for:

• Loan application processing times
• Property settlement dates
• New job start dates
• Required notice periods

Expert Tips for Success

Drawing from our extensive experience at Original Wealth, here are proven strategies for managing job changes during the home buying process:

Maintain Clear Records

Keep detailed records of all employment-related documents, including:

• Past pay slips
• Tax returns
• Employment contracts
• Performance reviews
• Professional qualifications

Consider Timing Carefully

Before accepting a new position, evaluate:

• The stage of your home loan application
• The impact on your borrowing capacity
• The new role’s alignment with your career history
• The timing of your property settlement

Work with Your Mortgage Broker

Your mortgage broker can:

• Assess different lender policies regarding employment changes
• Recommend the best timing for your job transition
• Help prepare additional documentation
• Navigate potential challenges with lenders

Conclusion

While changing jobs during the home buying process adds complexity, it doesn’t necessarily mean the end of your homeownership dreams. With proper planning, open communication, and expert guidance, you can successfully navigate this situation.

At Original Wealth, our experienced mortgage brokers understand the intricacies of employment changes during the home buying process. We work with over 60 lenders to find solutions that match your unique circumstances.

Whether you’re considering a career move or have already accepted a new position, we’re here to guide you through the process and help you achieve your property ownership goals.

Contact Original Wealth today to discuss your situation with our expert mortgage brokers and discover how we can help you navigate your home buying journey, regardless of your employment circumstances.