|
When we sit back and try to think of every possible consideration that a bank and a home seller will take into account when you go to buy a home, one thing that probably doesn’t factor into our thinking is a recent job change. But yes, even that can have an impact on how the bank or mortgage broker approaches your application and even how the home seller looks at your offer sheet. Let’s take a closer look at how something as simple as changing jobs can change the way a bank approaches your loan application. Here are some Buyers Tips for
Purchasing Sarasota Real Estate.
- For most people, changing jobs doesn’t impact buying a home, unless, of course, you just changed jobs and now you’re making less money. The main impact comes from stability. A bank does take your job stability into account when figuring how much of a loan you qualify for. If you have been at a well-paying job for a few years, you might want to delay changing jobs until you close on your home just to keep that uninterrupted line of employment solid. It can be hard passing up a chance to earn more, but your main focus during the home buying process should be on giving off an air of stability.
- Depending on how you earn your money, you can get into trouble by switching jobs. If you’re salaried or hourly, you shouldn’t have any real problems. The main issue is how the bank extrapolates your earnings over time. This is a huge part of qualifying for a mortgage. The bank sits down and looks at what you’ve earned over the past few years and what you’re earning now and tries to estimate what you’ll be earning over the next decade or over the life of the mortgage you’re applying for (15 or 30 years, usually). This is why stability at one workplace is important. It’s also important that if you work at a job where you earn a major chunk of your money from a bonus that you do not switch jobs. A bank will, in most cases, not count bonuses as part of your future income. So even if you’re working in the same field where you make bonuses, say, as a car salesman or some other field that is heavily based on commission, a bank will, in most cases, not consider future bonuses or commission as part of your salary. For some jobs, this can be crushing to your hopes of getting a good mortgage, and thus, a good home.
- If you’re a part time worker, then you might want to stick with your same job. This is based on both previously stated reasons. You’ll be showing the bank that you’re consistently employed with one employer and you also have a stable stream of income. If you’ve switched jobs right before applying for a mortgage, there is no way to guarantee to the bank that you’ll be receiving the same amount of hours at your new job and the bank will most likely count this against you. If you’re working part time in an hourly position, it is in your best interest to stay where you are in the year leading up to buying a home.
- If you work a lot of overtime to earn your money, again, it’s not wise to change jobs. For the same reason that part time work can’t be anticipated by the bank, overtime can’t either. While you may work at a job where overtime is commonplace, the bank isn’t going to risk their loan on someone who bases so much of their income on something that could dry up overnight. Stick with your current job if you’re getting a lot of overtime to supplement your overall income.
While changing jobs before buying a home won’t affect most people, especially if you’re going to a much higher-paying job, it can affect those that are buying a first home or those that are scraping together the funds to buy a home. The bank favors stability above all else, so even if you plan on switching jobs in the near future, it is probably in your best interest to put off the move until your other move. You have been reading some Buyers Tips for Purchasing Sarasota Real Estate. |
