Real Estate Guide: New Home or New Job?
New Home, New Job?
You're interested in buying a home, but you also want to change jobs. Which should you you pursue first? Depending on your work history and your mortgage lender, being in the market for a new job might impair your ability to buy or refinance a home.
Buying your home first
Mortgage experts generally advise completing any prospective or ongoing real estate transactions - buying, selling, or refinancing your home - before launching a major career move. This is doubly true if you're planning to start your own business or become an independent contractor, where income may ebb and flow, and the start-up may be tough.
For a lender, a change in jobs could raise questions. Lenders not only verify employment at the beginning of the loan application process, but some now re-verify such information in the final 72 hours before your closing. If your lender learns that you're starting a new job in the immediate future, your mortgage loan could be postponed or even denied. If you withhold information about an impending job shift, you could potentially be committing income fraud. The best strategy for many borrowers is simply to complete the loan process in its entirety before contemplating a new job or a career change.
Changing your job first
For some borrowers, making the career move first makes more sense. Changing jobs usually means higher income, which in turn helps you qualify for a larger loan amount and/or better terms.
Simply know that starting a new job or changing careers in the middle of the application process is going to mean additional time and potential red tape. Many lenders will want to see an employment contract or a letter with a job offer before approving a mortgage. And if you're counting on any kind of future raise or bonus, and you're adding that into your projected income, you'll probably be asked for a letter from your employer confirming that, too.
Mortgage lenders are more conservative than ever today; they require complete verification, and usually re-verification, of every detail regarding your income and employment.