Mortgage After Switching Job

[DaveT123]

Hi,

I am hoping to buy my first home in the near future (ideally in less than a year). I am currently working as a salaried civil engineer. I have been working for 4 years. I am thinking of switching jobs to work for a software company on their technical sales team. My new role will also be salaried (with a commission bonus). I am worried that mortgage lenders will see this as a field change and it will hurt my chances of getting approved for a loan. So my questions are:

1) Do you think this will hurt my chances of getting a loan? Or do you think they will see Engineering and Technology as similar fields?

2) If it does hurt my ability to get a loan, how long will I need to prove income at the new job before I can apply for the mortgage?

Thanks in advance for the help!
-Dave

 

[Moe Bedard]

Hello,

My understanding is that yes, it may hurt your chances since it is a different field. They do look at this things pretty strictly. You would need two years of what is called "job seasoning" to qualify for a mortgage with almost all lenders .

 

[Erik Sandstrom]

Hi Dave,
Moe is right on the money.

When you switch jobs you want to stay in the same industry, then the 2 year seasoning wouldn't apply. If there's an argument to be made that is in the same line of work I can always pose the question to my underwriters.

How much time do you have before you switch jobs? Buy NOW before you switch jobs and then move into the new career is what I would recommend if you have the ability. Ultimately I would tell you that you have to do what's best for you and your family. If this job opportunity won't be available in the near future - take the job! The house can come in time even though you may want it now.

 

[DaveT123]

Thanks Erik and Moe - I really appreciate the feedback.

Unfortunately, I don't think I would have time to close on a house before switching jobs. I'm already looking to push the job start date back to the beginning of March. One month doesn't seem feasible to look at the homes we like, make an offer, and close.

I was doing some reading and I am going to be a first time home buyer. The income requirements for FHA loans seemed a little more lax. It seemed like they were only interested in steady (or growing income). My income has steadily grown over the last 4 years (38%) at my current. At my new job, my income will increase a little more. Do you know of any loan options that have less requirements for the time at current job?

 

[Erik Sandstrom]

FHA will still look at the line of work you're in and going to, there's unfortunately no way to avoid that. The income requirements are more lax with FHA in the aspect that they go to a higher debt-to-income ratio.

The only angle I could think of would be my portfolio/risk based underwriting. If you wouldn't mind an interest rate in the 7-8% range I can look into it further...please let me know.