Getting A Mortgage With A New Job: What To Know

Hitting a life milestone is exciting, like getting your ideal job at your dream company. However, it can get complicated when you find your forever house at the same time.

Getting a mortgage with a new job can be complex, but there are some steps you can take to help your chances of a successful mortgage approval.

Can You Get A Mortgage With A New Job?

Mortgage lenders like to see a 2-year history in your current job position. However, it’s possible to be given the green light without that 2-year history if you’re transferring into a new role.

We recommend you discuss your job situation with your lender before starting your loan application. Provide your lender with as much physical proof as you can to provide qualifications for approval.

What To Do If You’re Changing Jobs While Buying A House

There will be extra steps you need to take if you’re thinking about switching jobs while house hunting. If possible, it’s best to wait a while after closing on your home to change jobs, but life changes can happen suddenly.

Items To Present To Your Lender

If you do find yourself changing jobs while buying a home, having the right documentation can make a difference. Here are some things to consider having on hand to increase your loan approval odds:

• Offer or title change letter: Present a letter of intent from your new employer if you just got a new job. Present a title change letter if you’re staying at the same company but are being promoted.
• Verification of employment (VOE): Similar to an offer letter, your lender may require a verbal or written VOE from your new employer.
• Most recent pay stub: Have your most recent pay stub on hand to show evidence of current employment.

Switching Jobs During Or After The Closing Process

Discuss with your lender if you plan to switch jobs while finalizing your home loan. They need to know you can show proof of stable income before approving your home loan. There’s less risk of loan delay if your new job is in the same industry and has a similar or improved salary.

Most lenders conduct a verification of employment within 10 days before your loan closes, during which your current employer will be contacted to verify your employment.

How Mortgage Lenders Consider Different Types Of Income

The way lenders view your income and job title changes can impact your ability to get a mortgage with a new job. Here’s a breakdown of how lenders evaluate different payment structures.

Annual Salary

If you earn an annual salary, it’s easier for lenders to determine your ability to repay your loan – especially if you’ve been employed for 2 or more years. This is the easiest, but not the only, type of income for lenders to verify with pay stubs and W-2s.

Switching from one salaried job to another can also make verifying your income easier. Providing a pay stub from your new job is ideal for the best chance of approval. For most loan types, lenders want to know if your employment is likely to continue for 3 years.

However, if you're relocating for a job, it might not be possible to provide a pay stub. Depending on your lender, they may ask for a VOE letter or additional documentation.

Bonuses

When underwriting mortgages, lenders are looking for consistency. That’s why bonus income is a bit trickier. Since bonus income isn't always consistent, your lender may need to verify the average bonus you can expect to receive and how it’s structured.

If your new job is offering a consistent bonus as a percentage of your salary, that’s something lenders can verify. They could ask you to provide certain documentation from your new employer, like a VOE letter, offer letter or employment contract. Your chances of approval may increase if your bonuses trend upward over time.

Hourly Wages

For hourly wages, your mortgage lender will want to verify both your hourly wage and the number of hours you work. This can usually be achieved by providing pay stubs and previous W-2s.

If your hours aren’t consistent or you make overtime pay, your lender will likely average your income over the last few years to get a better estimate. If you’re switching jobs, this will likely entail paperwork similar to other types of income, like a VOE or offer letter.

Commission

Since commissioned wages can change over time, your mortgage lender will want to verify the past 2 years of your wages. They’ll also want to see that this income is steady or trending upward.

Applying for a mortgage with a new commission-based job can be tricky. If you’re making both a salary and commission, qualifying based solely on your salary could make things easier. That said, in this scenario, you should speak to your lender about the best course of action.

Job Title Changes

Whether you're changing jobs entirely or changing titles at your company, lenders will likely need details on your new position. Changes viewed as positive and consistent are least likely to negatively affect your mortgage.

If you're staying with the same company, but recently got a raise or new job title, this could be viewed positively by lenders. Likewise, a more senior position at a new company in the same industry may be viewed favorably with proper paperwork.

Lenders may take a closer look at any change, especially less traditional changes. Changing industries, multiple recent job changes or a change in payment structure could hurt your chances of being approved.