Starting a new job is an exciting chapter in life.
Whether you’ve just landed your dream role or transitioned to a new industry, this career move might also come with the desire to buy a home. But how does starting a new job impact your ability to secure a mortgage? Here’s what you need to know.
1. Stability Matters to Lenders
Mortgage lenders prioritize stability when evaluating loan applications. They want to see consistent income and employment history to ensure you’ll be able to make your mortgage payments over time. A new job can raise questions about long-term stability, but it doesn’t automatically disqualify you.
Tip: If you’ve maintained steady employment in the same field or have a contract for your new position, lenders may view this favorably.
2. Provide Proof of Income
Your ability to prove a reliable income source is crucial. With a new job, you’ll need to supply documentation such as:
- An employment offer letter.
- Recent pay stubs.
- Bank statements reflecting direct deposits.
Tip: If your position includes bonuses or commissions, be prepared to explain how they’ll contribute to your overall income.
3. The Role of Your Job Type
The type of job you’ve taken can also affect the lender’s perspective:
- Salaried positions: Lenders often view these as more stable.
- Contract or freelance work: You may need a longer track record to prove consistency.
- Self-employment: Generally, self-employed borrowers need at least two years of income history to qualify for a mortgage.
Tip: If you’ve transitioned into a similar role with comparable income, it may help ease a lender’s concerns.
4. Consider Your Down Payment
A larger down payment can reduce a lender’s risk and strengthen your application. If your new job has increased your earning potential, use that to your advantage by saving aggressively for your down payment.
Tip: A down payment of at least 20% may also help you avoid private mortgage insurance (PMI).
5. Be Mindful of Timing
If possible, consider waiting until you’ve completed a probationary period or received your first few paychecks. This provides lenders with additional reassurance about your job stability.
Tip: Timing your mortgage application to coincide with a few months of consistent income can improve your chances of approval.
6. Work with an Experienced Mortgage Professional
Navigating the mortgage process with a new job can be complex, but working with a knowledgeable Advisors loan officer can make all the difference. They can help you understand your options, address potential challenges, and present your application in the best light.
Tip: Be upfront about your employment situation when speaking with your mortgage professional so they can guide you effectively.
In Conclusion
Securing a mortgage with a new job is possible, but preparation and transparency are key. By demonstrating stability, providing thorough documentation, and working with an experienced lender, you can position yourself for success.
Remember, buying a home is a long-term investment. Take the time to assess your financial situation and consult with experts to make informed decisions. Your new job is just the beginning of this exciting journey toward homeownership!
By: Jon Iacono