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Can I Get a Mortgage After Changing Jobs?

Lenders like certainty. For them, when a borrower has a stable job, there is less risk of loan default. A career change, relocation, or employment gap only adds uncertainty. Fortunately, you can still get a mortgage if you change jobs. Here is how it will impact your mortgage qualifications.

How Do Lenders Look at Employment?

Mortgage lenders carefully review all parts of a mortgage application. They will verify your employment by contacting your employer and recent income statements. That way, they can be sure that you earn what you say you earn.

Lenders typically want information, such as position title, income, and length of employment. These details indicate job stability and your ability to make monthly mortgage payments. If there are differences between the mortgage application and what your employer says, lenders may raise a red flag.

How Does Income Affect My Mortgage?

Underwriters look at your most recent work history during the mortgage application. That includes W-2s, 1040s, tax returns, and pay stubs. Lenders prefer applicant that have been at their current job for at least two years.

This financial information goes hand in hand with how much a lender will provide for a mortgage loan. Higher salaries and greater job security mean larger loans and vice versa. The way you make money matters, too.

Lenders prefer salaried applicants because they have the most income certainty. Hourly employees undergo more scrutiny because their work schedule and income may fluctuate. Note that a lender typically does not count commissions, bonuses, or up-coming promotions toward the application.

How Does Getting a New Job Affect Getting a Mortgage?

Underwriters look at your last two years of work history. If you decide to change jobs before or during the mortgage application, the move will raise an eyebrow. The amount of concern, though, will depend on the industry and salary of the new job.

The best-case scenario is that you move to a higher paying job in the same field. In this case, you will have no problem moving forward with the mortgage application. Moving to a better paying job in a different field is a close second.

Lenders get nervous when you make a dramatic career change. The switch is generally considered a sign of instability. That can include:

• Changing career fields
• Making less money
• Moving from a salaried to commission-based job
• Moving from a salaried to self-employed position

Say you traded in your career as a banker to become a baker. The transition would make getting a mortgage more challenging. As a rule of thumb, lenders will have you wait two years before getting mortgage approval.

Can I Get a Mortgage While Relocating?

Getting a mortgage while relocating is tricky, but not impossible. It is complicated because you need income and stability at the same time that you're moving and house hunting.

The best thing to do is to get mortgage preapproval. A lender will indicate how much of a loan you qualify for after evaluating your financial history. It will also increase your bargaining power and save you time when looking for homes.

If your new job requires moving to a different city, your underwriter may want additional documents. Again, it is their way of making sure lenders, applicants, and employers are on the same page. If you're planning on a big move, talk to your lender in advance. That way, they can help you navigate the mortgage process.

The Bottom Line

Can you get a mortgage after changing jobs? The boring but true answer is it depends. Many career moves, such as a promotion or new better-paying job in the field, will likely improve your odds of mortgage approval. However, if the lenders believe the career change increases the chances of default, getting a mortgage becomes more difficult.

Every career decision you make has a unique impact on your potential mortgage approval. To understand how your career change affects your mortgage, talk with a United mortgage advisor today.