Yes, you can change jobs while purchasing a home, but it might affect your loan approval. Your employment history is often vital to a mortgage lender, and a change in job could impact the way they view your reliability. Your loan could shift in the middle of the purchase, and the paperwork might get complicated.
If you’re moving from a lower-paying job to a higher-paying one, the mortgage lender will view it differently from moving from one company to another for no apparent reason. This choice can have a considerable impact on the future of your payments, so it’s critical you consider the worth of the move before committing.
If your move can wait, you might want to hold off on the shift until after you have the home and the loan. It will serve you better in the long run. If you can’t, continue and be ready to defend.
The mortgage application is a critical part of getting a loan for the home you’re about to invest in. One of the most prominent factors in this application is your job history. So how do you handle changing jobs with a mortgage application? Let’s dive right in.
Changing Jobs After Mortgage Approval
If you change jobs after a mortgage approval, it’s critical to be as communicative with your lender as possible. Inform them of the change, explain yourself, and provide any letters of recommendation or approval that they might need. Although not recommended, you can change jobs after you get mortgage approval.
Whether anything changes depends on how your lender views the situation. Are you moving into a better job? A worse one? Will you still be able to make the payments on time? Consider the answers to these questions before making the change.
Changing Jobs During Mortgage Application
It can be chaotic if you submit your mortgage application and change jobs before the loan is approved. You will need to form a new application based on this new job, and the underwriters need to do more work. It’s possible to lose the loan at this point if the lender thinks you’ve become unreliable.
If you’re set on changing jobs in the middle of the applications, ensure it’s a quality job that will look good to lenders. Don’t mess everything up and request they give you a loan if your new job is worse than the one before.
Yes, your mortgage offer might be affected if you don’t talk to your lender about changing jobs or getting fired. Be as transparent as possible to keep everything intact as you get a loan. If you have to change jobs, get ready to explain the shift to the person loaning you the money. They might not appreciate the change. However, things should be fine if you explain yourself in full.
Most of the time, you need to work two years in one space to qualify for a loan. This dedication will prove that you are a reliable individual who can be trusted to make payments on time. If you change jobs, ensure you’re there for at least half a year.
Once you’ve moved in and closed on the home, you can change careers as soon as you want. Most of the time, closing means the mortgage is locked in stone. However, in some states, the bank can deny a mortgage after closing if they haven't disbursed funds yet. But this only happens within a few days of closing, so if you want a week you'll be covered. Regardless, it's a good idea to talk with your lender to ensure they know what’s going on in your life if you need to change jobs or if you get fired. The last thing they want is a surprise.
If you change jobs before closing a deal on the house, your loan could suffer. Lenders like to see a stable job relationship. A job change happening very close to closing could cause them to rescind their offer before you can close and finalize the loan and purchase. Therefore, it’s better to hold off on changing jobs until after you have found a place and closed on the loan.
If your job change is urgent and cannot wait, ensure you’re changing jobs for a valid reason. For example, if you want to switch because you’re bored, wait until after you buy the house.
Yes, some lenders will verify your employment on closing day. However, most lenders will check on your employment a bit earlier, usually within about ten days of closing to ensure you’re still at the place you said you worked. This action ensures you remain a trustworthy person to loan money to for a home. If you’ve switched or quit, your mortgage loan might end up falling through.