Home loan

Can I change jobs while applying for a home loan?


Many lenders require you to have a permanent job with the same employer for at least six months before applying for a home loan. If your employment situation changes for any reason while you are applying for a mortgage, it could reduce the chances of your application being approved. But contacting the lender as soon as you know your employment status changes can help you reach an agreement.

Why do lenders want you to stay in the same job?

Mortgage lenders want to be sure that a borrower can comfortably afford home loan repayments before approving an application. To assess this, lenders will ask you for statements of your income and expenses as part of the home loan application process.

While having a high income and low expenses is often a good thing, consistent income can be just as important. This shows that your finances are more likely to remain stable over time and you are more likely to be able to pay your repayments as needed.

If you change jobs or careers often, you are more likely to default on your mortgage because you may not always be able to maintain your income when you change employers.

Keep in mind that most lenders will focus primarily on income paid by an employer as part of your normal salary or wages when applying for a home loan. Additional income, such as bonuses and commissions, may not be considered as they may not be a consistent feature of your income stream. This is also why freelancers, entrepreneurs, sole traders, etc. may need to apply for low-doc or alt-doc home loans.

Can you apply for a home loan if you are in a new job?

The longer you stay in your job, the more comfortable a lender can feel about the stability of your finances. Different lenders have different minimum standards for how long they will want you to stay in a job. If your employer has a trial period, passing that period is often a good first step. Staying in a job for at least 6 months to a year or more could greatly improve your chances of approval.

What if you found a new job while applying for a home loan?

Changing jobs could complicate an ongoing home loan application, as the lender needs accurate information to assess your finances. If you start your application in one job and then move on to another, your income and expenses will no longer be correct and the lender will have to recalculate your ability to meet repayments.

Notifying the lender of your change in role as early in the process as possible could help make things a little easier, as the lender will have more time to report on changes in your situation.

Sometimes a lender may be willing to reconsider your mortgage application if you are moving into a new job that is still in the same field that you have worked in in the past, for example if you have worked in accounting for years. years and you just got a new job at another company. It could also help if the new role offers a higher salary.

It may also be helpful to provide the lender with a letter from your employer vouching for you, as this may demonstrate that you are moving into a new, secure role.

You may also consider contacting a mortgage broker for assistance with your application. Brokers are mortgage experts who can help you find the lenders most likely to accept when you start a new job. They may also be able to negotiate with the lender on your behalf and help you manage any complications in the application process.

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