Financing in 22202>Question Details

Joshua, Home Buyer in Arlington, VA

I've heard that length of employment is an important factor that lenders consider when going for a mortgage.

Asked by Joshua, Arlington, VA Tue Mar 31, 2009

How important is this? I have the opportunity to take a new job next month with a higher salary, but I don't want that to adversely effect how lenders see me when I go to buy my first home in the summer months. I have been with my current employer for over three years.

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Mostly what it really boils down to is what your credit looks like, your credit score and income to debt ratio.
You should be fine, but get in touch with a local lender and meet with him/her to get pre qualified (no obligation to do that) so that you know exactly what you can expect to get for a loan and monthly payment with your PITI included.
0 votes Thank Flag Link Tue Mar 31, 2009
Changing jobs has no impact whatsoever if you are a fulltime salaried employee.

I've done mortgages where people were on unemployment, graduating from college, changing careers etc. They key is: Do you have a regular base salary (W-2 income)? I suspect the answer here is "Yes"

The only time length of employment becomes an issue is if you are an hourly employee and your hours vary, your job is part time, you will be using overtime or bonus/commission income to qualify and so on.

One word of caution: Do not expect to close if you are between jobs. make sure you seamlessly go from one to the next. If you are transitioning, your lender will require at least one paystub from your new job in most cases. (Don't take a few weeks off before starting the new job if you have a closing pending !!!)

Ruth Bonapace
mortgage specialist
ruthbonapace@gmail.com
(Residential Home Funding)
0 votes Thank Flag Link Tue Mar 31, 2009
Hi Joshua - three years should be fine. Also lenders usually look at your previous place of employment if it was in the same type work that you are currently involved. I can give you the email of a lender Kelly.nance@wellsfargo.com should you want more information, or you can go to my website which will link that email address.
0 votes Thank Flag Link Tue Mar 31, 2009
Chris is right. Its all about "compensating factors these days!
0 votes Thank Flag Link Tue Mar 31, 2009
Another benefit of taking the job is that you will likely be able to qualify for a higher loan amount.
0 votes Thank Flag Link Tue Mar 31, 2009
Hi. Lenders look at time on a job as a "compensating factor". This means if you have a low credit score, few assets, or a high debt-to-income ratio (DTI) then a long time on the job can offset one or more of those. However if you have good credit, assets, etc. I would take the new job. They will look favorably at the higher income (lower debt-to income ratio). Keep in mind the job should be in the same line of work. If you have any other questions you can contact me chris@firstwashingtonmortgage.com. Hope this helps.
0 votes Thank Flag Link Tue Mar 31, 2009
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