Home Buyers Tips

Changing Jobs Affects Your Ability to Purchase a Home

Dont Change Jobs Before Your Purchase

Salaried Employees

If you are changing jobs and are staying in the same industry at a higher level of pay, a job change should not affect your ability to qualify for a home loan. The higher salary will help you better qualify for a mortgage. If you are considering changing industries, this will cause problems in qualifying for a mortgage.

Hourly Employees

If you are an hourly employee accustomed to working a straight forty hour week without overtime and are considering changing your job, this should not be a problem, if you stay in the same industry. If you are accustomed to earning overtime and the new position does not guarantee a certain amount of overtime, this could be a problem in acquiring a home loan.

Over-Time Hours

Since overtime is never a guarantee lenders will determine your overtime earnings based on an average of your last two years. If you change jobs there will be no track record so this would impact your ability to purchase a home.

Commissions Employees

Mortgage lenders will average the commission portion of your income over a two year period. Changing jobs in a commissions environment, even if you stay in the same industry and sell the same service or product will negatively impact your ability to acquire a home mortgage. Your future earnings cannot be determined because there will be no track record from which to do so.

Self Employment

If you are self employed your lender will want to see a two year track record at the minimum before approving you for a home loan. Self employed individuals generally deduct a tremendous amount of expenses from their earnings, which can also have a negative impact on your ability to qualify for a home loan. If you are thinking about changing to self employment before your home purchase, DO NOT DO IT! Buy the home first.

If your are considering incorporating your sole proprietorship, or are considering a partnership, you should delay that until you purchase your new home.

The best case scenerio is not to make any changes at all until after you have purchased your home.

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