How does changing jobs, in a new field, effect mortage approval?

Asked by Jokam49, 95120 Wed Nov 17, 2010

My boyfriend and I are currently pre-approved for a mortgage, and I am the co-signer. I have been in the process of slowly making a change from my current career in the graphic design field, to a career in the fitness industry. An opportunity has come up for me to make the switch, but I am worried that if I accept the job, our pre-approval will be negatively effected. Is it possible to change careers and still go through with closing on a mortage?

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33
Don Maclary, Agent, Virginia Beach, VA
Sun Nov 21, 2010
New job new field = almost no chance of being financed.
2 year history is sometimes ok if it is the same job different employer

Better call a loan officer and ask before deciding on a change.
1 vote
Joe Blow, , Santa Rosa, CA
Thu Nov 18, 2010
It depend on your position in the fitness industry. If your current position in graphic design and the new position in the fitness industry are both in the customer service side of their industry then that would be consiered the same line of work.

If you were going to become say, a personal trainer then that would not be the same line of work.
1 vote
Terri Vellios, Agent, Campbell, CA
Wed Nov 17, 2010
Ditto what Myra said. Changing jobs, especially changing fields can have negative consequences to your loan.

Call your lender and discuss this before making any changes to your debt or income. Including if you were to get married. It's all connected.
Web Reference:  http://terrivellios.com
1 vote
Vicky Spiva, , Redding, CA
Wed Nov 24, 2010
You are correct - if you change your line of work, the lender won't be able to use that income for qualifying purposes. You should get your house and then change lines of work if that is what you really want to do. Otherwise, you may have to wait for 1 to 2 years in order to buy after the job change. If you are currently working part time in the fitness industry & then obtained a full time position in fitness, your income should be able to be used. I hope this helps and if you need some more help with real estate financing, please feel free to contact me at vspiva@guildmortgage.com
0 votes
Renee Weinbe…, Agent, Long Beach, NY
Sun Nov 21, 2010
When qualifying you for a mortgage, lenders rely on a stable employment history with a couple of years of steady or increasing income to determine the loan amount you are capable of paying back. Switching jobs shortly before or after applying for a mortgage may make it much harder to qualify.
Web Reference:  http://www.reneeweinberg.com
0 votes
Bowen Agency…, Agent, Selinsgrove, PA
Sun Nov 21, 2010
The best advice is to check with your lender and ask them. Some lenders will look at your work history to see how often you change jobs. What is the history of the company you want to work for now? Stable, long term?
My experience the banks will consider a number of factors so it is not a complete negative. Other lenders will want to have 6 months of work history with the new company. Again, I suggest having a discussion with the lender.

If you get the mortgage first then change jobs it is a non issue.
0 votes
John Bowman, Agent, San Jose, CA
Sun Nov 21, 2010
Best case scenario, it will likely slow the process down and push back your closing date. If you want to be absolutely safe, my advice is to close escrow before switching employment, if at all possible.
0 votes
Suzi Mack-mo…, , Omaha, NE
Sun Nov 21, 2010
If you've been in your same field for some time, and the new position is in the same field, it shouldn't be a problem. If your changing to an unrelated job or field, unless you've got previous experience in that field, the lender may not be able to use that income. Rules for individual loans may allow differently. I can put you in touch with an excellent local lender who knows how to deal with problems & may have more ideas & ways to handle your problems.
suzi modlin NP Dodge Real Estate, Omaha (Bellevue, Papillion, Ralston, Millard) , NE
402-208-5088 cell
0 votes
Royal Real E…, , 90275
Fri Nov 19, 2010
If you are pre-approved for a mortgage, has no value unless you approved and sale escrow closes. You would need at least 6 months of stability at the new jobs, if you have good FICO. If you would like to change your job after pre-approval and prior to closing, it could most likely affect loan approval process. Your boyfriend is relying on your credit and income and seeking your assistance, as co-signor, clearly, he could not be qualified of his own. I would recommend, hold off on any job change. If you are concerned that you were waiting for job opportunity for quite some, I would definitely recommend get lender approval, prior to accepting any new job.
0 votes
Greg Fox Jr, Agent, Alpine, CA
Thu Nov 18, 2010
The answer to your question is possibly!

In your scenario it would be helpful to know whos income contributes the most to the loan. If it is your boyfriend, and you are able to qualify for the home you've selected on his income alone, then your changing jobs has no relevance.

Assuming your boyfriend does qualify alone, but not for the amount needed to buy the home you want, check with your lender to see if buying down the interest rate will help (this requires extra money at closing from you, but it is still an option to qualify for more home) or look into other loan programs such as a variable interest rate loan, which may help you get into the home you want.

If the home you are looking to purchase requires both of your incomes, then changing jobs right now from one industry to another is not recommended. Hold tight to see the loan through. It's difficult sometimes for an underwriter to determine if the career you left is in the same line of work as your new career. So to error on the side of caution underwriters will typically not consider your income and site it to a lack of work history since you were not in the same industry for the past two years.

I hope this helps in some way!
0 votes
Susan Walker, Agent, Grass Valley, CA
Thu Nov 18, 2010
This is a question you should definately ask your lender. But it has been my experience that this can negatively effect your preapproval. Lenders put a lot of weight on the time on job. If you were taking a position in the same field it probably won't effect you as much but in a new field there is a lot of uncertainty.
0 votes
Connie Iman, Agent, Oregon City, OR
Thu Nov 18, 2010
As a Real Estate Broker I always advise my buyer to check with their lender on important decisions like this one. Previous experience tells me that you should stay with your current position until you purchase and CLOSE (that means it's recorded....not just loan docs signed), and then make the career change.
Web Reference:  http://www.tower-realty.net
0 votes
Lovely Rehsi, Agent, Tampa, FL
Thu Nov 18, 2010
Unfortunately, changing the career will affect your approval. The lenders are looking at the stability of your job. Since it is different field, they cannot take a chance about the sucees you could have in your new career. The only way it could work is if what you did at the previous job is similar to what your new responsibilities are going to be. Otherwise, stay put on your current position. As always, do check with your lender before making any decisions.
0 votes
Christiel Ro…, , Amherst, NY
Thu Nov 18, 2010
Hello Unfortunately the answer to your question is No. You have to prove a track record in your new field for a least a year before you can apply for a mortgage. So I would stay put in your current job until you purchase a home and close on it.
Christie Rothschild CRP
Licensed Associate Real Estate Broker
Amherst, New York
crothschild@mjpeterson.com
0 votes
Angela Strong, , Cincinnati, OH
Thu Nov 18, 2010
Pre-approval is different than the actual approval process which is much more involved. Because the length of employment is a big factor it could, in fact, negatively affect, the process if you make a career change . As always, please check with your mortgage advisor for his/her expertise on the matter.
0 votes
Tracee Hendr…, Agent, Portland, OR
Thu Nov 18, 2010
Typically a lender will want to see 2 yrs in the same job or like job. A verification of employment is typically done at the end of a transaction so you risk having everything fall apart right before closing. Check with your lender for particulars.
0 votes
Tom Martin, Agent, Gadsden, AL
Thu Nov 18, 2010
Most mortgage companies REQUIRE a 2 year work history with the same job. If you change jobs before or during the buying process, it could very easily effect you approval for a mortgage. Sorry. It would be best to check with your mortgage provider, but I will bet they will tell you the same thing. Good luck and thanks for the question.
0 votes
Dallas Texas, Agent, Dallas, TN
Thu Nov 18, 2010
It is highly recommended NOT MAKE CHANGES in career till AFTER you have closed and keys are in your hands.

The wait to close on a home is approx. 45 - 60 day - or + after executed contract signed by all parties.

GREAT QUESTION

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes
Ginny Willis, Agent, Pelham, AL
Thu Nov 18, 2010
Simple answer, yes but there is always an however. If you have a degree it the area of the job change it may not. What the mortgage companies are looking for is job security. The longer you are on the job the better. So if you were say a CPA and changing companies no it would not. It you were a new college grad with a degree in fitness they may count that income right away.
0 votes
Lynn Walters, Agent, Morris, IL
Thu Nov 18, 2010
Generally it would be better if you do not change careers until thof the ownership of the peoperty.e purchase process is completed.
To clarify, the problem is not changing employers. If you remain in the same field, and change employers the effect is not as dramatic as changing career paths,

Since you are a co-signer, I would suggest that you inquire if the loan would be approved only on your boyfriend's income. This way you would be free to pursue your new career.

You can be added later to the deed to insure you have an interest in the property.
0 votes
Kris Seegren, Agent, Waukegan, IL
Thu Nov 18, 2010
Lenders historically have wanted at least 1 full year steady employment at a job .. changing to a different job in the same field could be okay, but changing to a different job in a different field will most likely cause a problem. And I don't believe that being just a co-signer will make any difference - the main reason typically for the co-signer is for the income (not the credit score) - I wouldn't "rock the boat" at this juncture in your loan approval!
0 votes
John Annand, Other Pro, Lawrence, NJ
Thu Nov 18, 2010
Hi Jokam, if the fitness job is not salary based then do not make the move now. If it is 1099 based you will need 1.5-2 yrs at a minimum to develop an income that can be averaged for underwriting purposes.
The salary is is the key.
(BTW - this is a case where you would use "affect" , the mental trick I use is that if the "Action" will have an effect then use affect - hope that makes sense. Good Luck in your house search!
0 votes
PATRICIA CUC…, Agent, ABINGDON, MD
Thu Nov 18, 2010
Hi Jokam49!
It could affect your loan. The banks are even more stricter now than ever. They want to see a proven track record of your employment and with you going to an entirely different career, that could prove a toxic move. If you were going into the same field that you have been working in and just moving up in your career, that is different but to switch careers in mid stream of a mortgage application and approval, that could kick you right out. Is there anyway you can hold off switching jobs until you go to settlement?
0 votes
, ,
Wed Nov 17, 2010
There is only one way that this would not make a difference, and I doubt this applies to you. If you took a job when you were just out of school until one opened up in your field, then it can work, AS LONG AS YOU ARE SALARIED. Now, this is also one of the big problems that you will have moving into the fitness industry. It is less likely that your new job will be salaried. On any hourly job, you would need 2 years' history of hourly work to be able to use the income.
0 votes
Lang Lequang, Agent, San Jose, CA
Wed Nov 17, 2010
First, how long is the pre-approval? some lender has an expiration on the pre-approval so you need to check that. Usually lender requires at least 2 years in the same line of work and if there is a career change, it may delay the closing of the loan if you are already in contract. Depending on the stage of the buying process, you may check with your lender but at the same time, you do not want to loose the opportunity. Can you handle two jobs or one full time, one part-time?
0 votes
, ,
Wed Nov 17, 2010
Your decision to change employment will effect the outcome of acquiring a home loan. All lenders want to see a history of income in the line of work you are in. If you change professions there isn't a history of income. A pre-approval is based on the information you provided at that given time. Should that information change, the outcome could be very different.

Also, if you are currently a W2 employee (hourly pay) in your graphic design postion and you go to a fitness position as self employed, that would adversly effect getting a home loan.

Let me know if I can be of assistance.

Cheryl Garner, Mortgage Expert
Fairview Mortgage Capital, Inc.
(661) 255-3335
Web Reference:  http://www.cherylgarner.com
0 votes
Michael Robe…, Agent, San Ramon, CA
Wed Nov 17, 2010
Hi Jokam49, Great answers below! The consensus is that it will affect you. Erica's point that you can wait is a viable option as well as others who believe you should buy now and then change careers.

My take is that with the wide range of options it would be most beneficial to make 2 lists. One listing the benefits of the new job and the second list the benefits of a new home. Weighing them out will help you determine what you REALLY want and the importance.

This will help you make a financial decision while taking into consideration how heavily it is weighted by emotion.

Emotionally based decisions, that affect your financial picture, can be detrimental to your financial well being.

In your case your new job may have a higher emotional return. It won't prevent you from getting a home soon, however the new home may prevent you from enjoying a great career!

Michael
http://losgatoshomesandrealestateblog.com
0 votes
George Nowic…, Agent, Santa Clara, CA
Wed Nov 17, 2010
Jokam49,

It will most definitely affect your ability to get a loan in this market. Lending guidelines are more strict than ever and even the better qualified buyers are having to jump through hoops. It's was actually a good thing for the industry overall to tighten the guidelines but at this point the process is a bit extreme. Not a bad thing but a heck of a lot more work for all concerned. My advise is that you talk to a lender or several lenders before you make the change. I have had first time buyers that did not get approved my one lending institution only to get approved by another. Not all lenders are the same in this market. Some lenders just follow a check list and others, the more "hands on" lenders, can make a "make sense" deal work. Your agent should be able to advise you which lenders would be a good starting point for your pre-approval process. If you are currently pre-approved (not pre-quaified), explain your situation to your current lender. They will be able to address it with their underwriting department and let you know how that will affect your loan. Again, work with your agent and get their advise. He or she should be a great resource in helping you get the right lender.

George Nowicki REALTOR®
Cell: 408.892.3379
DRE# 01363797
Email: George@Nowicki.net
Website: http://www.GeorgeNowicki.com
Website: http://www.AlmadenRealEstate.info
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Alain Pinel Realtors
1071 Blossom Hill Road
San Jose, CA 95123
408.754.1500
408.754.1501 fax
0 votes
Erica Glessi…, Agent, San Jose, CA
Wed Nov 17, 2010
Once you have three to six months pay stubs, as a co-signer, it shouldn't be that big of a deal. So if you have a new job opportunity that you want better, you might want to take it and then buy a home in a few months.

Also look at your credit (FICO) score and spend time inching that upwards. Every set of points that FICO goes up gives you a better loan rate.

Most lenders have some steps you can take -- for instance, declining an offer of a free credit card can give you 25 points. So, look at everything you can do to get FICO high. Both you and your partner should seek to increase the FICO as high as possible before the loan is "locked," because the higher the FICO (coupled with the other factors) the lower the loan rate.

On income, the big information is ratio of income to debt.

A good job is actually very precious. I wouldn't stress on the loan approval unless you want to buy a house within the next two to four weeks. Then, buy the home, and then take a new job. But new jobs in good fields where you've been super eager are very special. The fact that you are one of two incomes and the other income is steady (if that is the case) should be a good buffer for you. Do get with a lender but don't let a loan officer make your job and career choices for you! Princeton Capitol has a really good system for approvals, it's also got excellent loan officers. Wells Fargo and Bank of America are among the most conservative as far as the "rules" around who can obtain a loan. So within lending institutions, you're going to see different responses and different sets of standards. They are not all equal.

Hope this helps!

Erica Nelson
http://www.EricaNelsonEstates.com
DRE 01425475
408-416-7090
0 votes
Allan Lorenzo, Agent, MILPITAS, CA
Wed Nov 17, 2010
It could definitely affect your loan approval because lender wants job stability from loan applicant. Unless you went to school for the new career that you are getting into, lender will consider that as part of your experience.
0 votes
Andrea Wince…, Agent, Milpitas, CA
Wed Nov 17, 2010
If your income is comparable it may not be a problem just as long as you've always had a continuous work history in whatever field. It is best to ask your lender his/her opinion as well because all lenders are different and they will know what underwriting will be expecting to see from your work history. Personally, I would buy my house first and then change careers.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Wed Nov 17, 2010
Your loan officer can better answer the question as it relates to your specific situation, consider asking him/her the question--can the career switch wait until after closing.....
0 votes
Myra Gouger, Agent, Las Vegas, NV
Wed Nov 17, 2010
Make the change after you get your mortgage and close on your home. When you are in the pre-approval stage, you don't want to do anything that will rock the boat. I have seen people lose mortgages because of something like this. So sit tight for about two months until you close and keep everything the same.
0 votes
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