Changing jobs is a natural byproduct of an ongoing career. If trying to look good for a bank, here is what you need to know for your new job to count for a mortgage.
Mortgage companies typically want you to have the same field of work for the most recent last two years. A solid two your work history is a good indicator of financial stability, and helps draw a clear path of income continuance. Here are example situations and how they play out with the two-year history:
You were previously in school studying the particular field. Now you have a brand-new job, without a two your work history, but your new occupation is in the exact field you were studying.
This scenario would be acceptable in nearly every mortgage loan program available in the marketplace with supporting documentation.
You just changed employers within the same field, but are now earning less money.
This scenario would be acceptable and the lender would use your current income for qualifying.
You just changed jobs with a new employer in a different field.
This scenario would be questionable on the loan program in which you are applying for. It would depend on how aggressive the lender you are working with is in making your file “work.”
Your new employment situation is temporary status i.e. temp income.
This income will be averaged. For example if you were recently previously a salaried employee for example and now you are switching to temporary income.
Docs you will need to support your financial situation
In most cases other than being in school, which can be supported with school transcripts supporting your field of study, lenders will want specific documentation about your new job and income to use for mortgage qualifying. A brand-new job needs to be specifically detailed with your new title, new role, and certainly your new income. Mortgage companies will want:
- date of new employment
- offer letter-identifying compensation
- a pay stub from the new employer
- verbal verification of employment (done in later on in the loan process)
- written verification of employment
These things are critical especially if the job you just took is brand-new and there is no history of earning a particular type of income for example going from salary to hourly or a large income bump. You should be able to get pre-approved with your new income and/or raise as long as the job change has a set date. The key is providing the above referenced items above while at the same time, providing timely documentation to your lender.
The top three mortgage programs including conventional, FHA, & Jumbo all follow the same requirements for using a brand-new job income to qualify. The transaction purpose does not matter if you’re buying a home for the first time or refinancing a home you already own.
If are already in the process of applying for a mortgage, it goes without saying do not change jobs in the middle of the mortgage loan process. If you’re going to change jobs, or if you know a possible change to your financial picture and income stream is in the works, handle that first, then begin the mortgage application process. Changing jobs in the middle of the transaction, not only can delay things, but can potentially impede your ability to secure financing. Another smart alternative would be to secure mortgage loan financing first then make a job change when you have a low rate, low cost affordable home loan that you can handle despite any possible gyrations in your income.
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