When you apply for a mortgage, the lender will consider several factors. Your employment history and salary are two of the most important. Switching jobs may or may not impact your ability to qualify for a home loan, depending on the circumstances.
Lenders Look for Stable Employment and Income
A mortgage lender wants to be confident that you will continue to be employed and will earn enough money to cover your loan payments. A record of stable employment and income that has remained steady or increased can help you qualify for a mortgage.
Being promoted to a more senior position with the same company and getting a raise, or accepting a position with higher pay for a different company in the same field, can work in your favor. Moving to a job in a completely different field may raise concerns for a lender since it will be difficult or impossible for the lender to know if your employment and income will be stable in the future.
Switching from a salary or hourly position to a job where some or all of your earnings come from commission may raise a red flag for a lender. It will have no way to know how much you will earn if you can’t provide documentation showing your income over a period of time.
Leaving a position with a consistent income and becoming self-employed can also make you look risky to a lender. If you’re just starting out on your own, a lender won’t be able to project your future earnings.
Should You Try to Buy a House if You Recently Started a New Job?
The short answer is that it depends. If you got a promotion that increased your earnings, you will most likely be approved for a home loan, as long as your finances are in order in other areas. If your new position will make you appear risky to a lender, you may find it difficult or impossible to get a mortgage right now. You may have to wait a period of time, possibly as long as two years, to be able to demonstrate that your employment is stable and that you make enough money to afford a house.
If you will have trouble qualifying for a mortgage, consider staying in your current home for the time being. If you have to relocate for your new position, renting a house or apartment may be the best option at first. It will give you an opportunity to get to know the area while you settle in at your new job. It can also give you an opportunity to save more money for a down payment and to pay off debt, which can put you in a better position when you eventually apply for a home loan.
