Can You Get a Mortgage After a Job Change? What Davis County Buyers Should Know

Often, yes. A job change does not automatically stop a mortgage. Lenders care about whether your income is stable, likely to continue and documented. A move to a similar role in the same field, with equal or higher pay, is usually easier to approve than a move into a new field, a switch from salary to commission or a gap with no income.

Charisse Walker is a real estate agent with Chalker Properties Group in Salt Lake and Davis County, Utah, and a licensed mortgage lender. On a deal where she is your agent, your loan belongs to your own lender and she is not your loan officer. Her lending background means she knows which questions to bring to that conversation, and the biggest one is to talk to your lender before you accept a new job, not after.

This article covers what lenders look at, how different kinds of job changes are treated, what documents to expect and how to protect your approval. Loan rules vary by program and by lender, so confirm the specifics with yours.

A lender wants to see that your income is stable and likely to continue. In general that means looking at:

• Employment history. Lenders commonly review about two years of work history. A new job within the same field often carries your prior history with it.
• Income type. Salary and hourly pay are easier to document than commission, bonus or self-employment income, which are usually averaged over time.
• Gaps. A break between jobs may need a written explanation.
• Probation periods. Some employers have a probationary period, and lenders may ask about it.
• Offer letter and start date. If you have not started yet, lenders can sometimes use a signed offer letter, but the rules depend on the loan program.

Ask your lender which of these apply to your loan. What an underwriter accepts depends on the program, and the underwriter makes the final call. The guide to getting pre-approved in Utah lists the documents lenders request.

Think of the change in three groups. These are general patterns, not guarantees.

1. Same field, similar or higher pay, salary or hourly. This is usually the simplest. Your work history is continuous, and the lender mainly needs to verify the new pay.
2. New field or lower pay. The lender will look more closely at whether the new income is stable and whether it still supports the payment. Your debt-to-income ratio may change. The article on debt-to-income ratio explains the math.
3. Moving to commission, bonus or self-employment. These incomes are usually averaged over a longer period, often two years, so a brand new commission job may count for less than you expect. If you are self-employed, see the article on home loans when you are self-employed.

A job change followed by a gap, such as a few weeks of unemployment between positions, is something to explain in writing. A short, clear letter from you often helps.

The safest timing is to avoid a change between pre-approval and closing. Lenders usually verify employment again shortly before closing, sometimes within days. If your employer or pay has changed since the lender last looked, the approval can be put on hold or withdrawn.

Your options by stage:

• Before you apply. You have the most flexibility. Tell a lender what is coming and ask how it will be treated.
• After pre-approval, before you find a home. Tell your lender at once. Your pre-approval was built on the old job, and it may need to be redone.
• During the contract. This is the riskiest time. Do not accept or start a new job without talking to your lender first. A change can delay closing or end the loan, and it can put your earnest money at risk if your financing deadline passes.

If a job change is unavoidable, ask your lender what documents will make it easy: an offer letter, pay stubs once you start, and a letter explaining the move.

Have these ready, and send them quickly when asked:

• A signed offer letter showing title, pay, pay type and start date
• Your first pay stubs at the new job, once you have them
• Your recent W-2s or tax returns from earlier years
• A letter explaining the reason for the change and any gap
• Contact information for the new employer's HR or payroll, for verification
• A history of commission or bonus income, if either applies

Lenders also verify employment close to closing. That can be a call to your employer or a request for a recent pay stub. Tell your employer's HR to expect a request so it is answered quickly. A slow reply can delay your closing.

• Not telling the lender. Lenders will find out when they verify employment. Telling them first is cheaper than being surprised.
• Quitting before the loan closes. Even a better job can raise questions if it has not started or the pay is not documented.
• Taking on new debt at the same time. A new car loan or furniture financing changes your debt-to-income ratio. Wait until after closing.
• Moving money around. Large deposits and transfers can trigger documentation requests. Ask before you move funds.
• Assuming the first pre-approval still stands. A pre-approval depends on the facts the lender saw. When your facts change, ask whether it needs updating.

Mistakes like these are avoidable with one phone call. If you are working with an agent, they can also adjust your contract deadlines when your lender needs more time.

This is a typical example, not a description of a particular client. A buyer in Davis County is pre-approved on a salaried job. A month later, they are offered a position at another company in the same field with a higher salary and a start date in two weeks.

Before accepting, they call their lender. The lender explains that a signed offer letter and first pay stubs will be needed and that employment will be checked again before closing. The buyer decides to wait to give notice until the offer letter is signed, and asks the new employer to confirm in writing.

The buyer starts the new job and sends the stubs. The lender updates the file. Because the buyer asked first, and the new job was in the same field with comparable pay, the loan stays on track. The same move without the call could have meant a scramble in the final week.

Can I buy a house if I just started a new job?

Often yes, depending on the loan program, the type of job and how the lender documents the income. Ask your lender about your specific situation.

Do I need two years at the same job?

Not always. Lenders commonly look at about two years of work history, which can include prior jobs in the same field. A gap or a field change may need more explanation.

What if I change jobs after pre-approval?

Tell your lender right away. The pre-approval may need to be updated based on the new job.

Will a new job with a higher salary hurt my chances?

It can help, but the lender still has to verify the income and your start date. Do not assume. Ask.

Can I be self-employed and get a mortgage?

Yes. Lenders typically look at tax returns over a longer period and average the income. Plan for more documentation.

Charisse Walker is a real estate agent with Chalker Properties Group in Salt Lake and Davis County, Utah, and a licensed mortgage lender. When she is your agent, she helps you build your contract deadlines around your lender's timeline, so a change in your work situation has the room it needs. Your loan stays with your own lender. As a licensed mortgage lender, she can also tell you which questions are worth asking.

If you are early in the process, the first-time buyer page covers the steps, the Farmington area page compares the area on commute and price, and the process page explains how she works.

Thinking about a job change and a home purchase in the same year? Tell Charisse your timeline and she will help you plan around it.