One of the key factors lenders evaluate with loan applications is employment of the applicant. The job the applicant has tells the lender a lot about the person's ability to repay the loan. If you are planning on buying a house soon and want to switch jobs, there are several things you should understand about this so you can avoid losing your ability to get a mortgage loan in the near future.
The last two years is the most important
As your lender looks at your application, they will be looking closely at your job, where you are employed, the length of the employment, and your income. One key thing lenders look for is making sure applicants have been at the exact same job for the last two years. If you pass this test, you will be one step closer to getting approved for a mortgage loan.
Being at the same job shows consistency and stability, and this is something that is very important to lenders that issue mortgage loans.
Changes within your own field might not be a bad thing
If you have not been at the same job for the last two years, your lender will look at the types of jobs you have had over the last few years. If the jobs were all in a related field, it may not look as bad as it would if you had switched career fields two or three times in the last few years. If you switched jobs simply because you were offered a better position with higher pay, you can explain this to the lender, and it likely won't be held against you.
Changes into a brand new field can trigger the lender to reject your loan application
When an applicant shows a history of switching jobs often and switching fields a lot, it can show a lack of stability and consistency. This is something that can trigger a red flag to lenders. Because of this, it might be better to get approved for a mortgage and close on it before you switch to a new job.
If you want to buy a house and need a loan to do so, you should carefully evaluate your current employment situation to see if it fits what lenders look for. If you have questions or would like to apply for a loan, talk to a loan officer at a bank or mortgage loan office.
Share16 May 2017
When I began my first business selling sports equipment locally, I knew the sports-world well, and I knew how to run a business. One thing I did not know a lot about was the financial world. I had never applied for a loan in my life other than when I financed my car with the dealership in-house financing. My first application at a large bank was denied. I began looking into my other options, and I found that there were more lenders for new businesses than I realized. I applied at local credit unions, local banks, and other business lending services. I was able to secure more funding than I even expected, and my credit is just average. I created this blog to help other new business owners realize that there is funding out there. You just have to find it and apply! Don't give up on your dream.