Financing in Pleasanton>Question Details

ashok, Home Buyer in La Crosse, WI

Would lending rates change because one changes jobs when taking a new mortgage loan?

Asked by ashok, La Crosse, WI Sun May 19, 2013

I'm moving jobs from one state to another. I'm looking to buy a property before starting the new job. I have a good credit score and financial history. I'm being told that since I'll not have started the job and received paychecks from the new employer, I'd have to pay a higher rate of interest on my mortgage. Is this reasonable ? should I be looking at a different lender?

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5
Ashok - the main question is whether you can approved without having rec'd a paycheck, and as Darren pointed out below, is there continuity of employment with your job change?

What I can confirm is you won't pay a higher rate due to your situation, UNLESS your scenario appears your purchasing a rental property (doubtful)....

And the only way you'll be able to get approved without showing the lender a paycheck during escrow is if your new employment contract is guaranteed and irrevocable (also doubtful)..

Let me know if I can be a further resource for you!

Best of luck, Jeff
0 votes Thank Flag Link Mon May 27, 2013
Hi Ashok:

I am not even sure how your lender is getting you a loan without having your first pay check from your new employer.

Standard Fannie Mae guidelines state that in order for new employment to be utilized, we must provided evidence that you are actually working at the new job. Period.

The best pricing/loan options come from Fannie Mae.

The reason your lender is telling you that your interest rate is going to change is because that lender needs to find a funding source that does not require the first pay check being received. If your lender can locate that for you, stick with her! This is not an easy find!

Your other option is to extend your close of escrow (if it is a reasonably short amount of time), until you receive your first pay check from new employer.
0 votes Thank Flag Link Mon May 20, 2013
Hi Ashoksesh,

The question is when are you planning to change jobs and has the property been selected and contract signed?

Thanks
Jacob
NMLS 327086
http://www.swanloans.com/web/pgcnfID_123677/Certified-Mortga…
0 votes Thank Flag Link Sun May 19, 2013
Hi Ashoksesh,

"Is this reasonable ? YES! ...

Aside from economic ebb & flow, mortgage rates are tied to underwriting risk. A job change; especially if it's a career change in a different industry, where you have not even received a pay check is an underwriting red flag of sorts. I'm sure if you were selling a car you would not hand over keys without proof the Buyer had the capacity to pay.


"Should I be looking at a different lender?"

Yes, no, and maybe...here are the differences in where you can obtain financing:

"Retail Banks vs. Mortgage Broker/Bankers"
http://tinyurl.com/6qln6nd

-Steve
0 votes Thank Flag Link Sun May 19, 2013
Personally, I only work with Mortgage Brokers or Mortgage Bankers (not the retail banks) that have their own underwriting departments and multiple funding options.
Flag Sun May 19, 2013
Thank you. I'm not changing professions, I'm actually going for a better paying job. The lender I went to was a local bank, would it make a difference with a national bank like BAC or WFC, in your opinion?
Flag Sun May 19, 2013
One very important question is, are you changing your profession? Your employment is an important factor all lenders will consider when determining your capacity to repay the loan as agreed. It sounds to me like you may want a second opinion, because with your good credit and sufficient down payment and reserves, you should not be charged a higher rate due to a job change (different than a career change). Please feel free to contact me for a free consultation. Pacificwide Lending is leading the way in mortgage lending in The San Francisco Bay Area California since 2002. Serving all of California. We are an accredited member of the BBB with an A+ rating and no complaints.

Darren Carlin
Pacificwide Lending
5506 Sunol Blvd. Suite 200
Pleasanton, CA 94566
(925) 872-0695
dcarlin@pacificwidelending.com
0 votes Thank Flag Link Sun May 19, 2013
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