Job change impacts your mortgage approval
Changing your job doesn’t always cause havoc
Changing jobs while buying a house doesn’t always derail your loan application. In this post, we are going to look at the typical changes that happen in the mortgage industry and how they can impact your application. When getting a mortgage, with a change in your job, your income will be reviewed deeper by the lender. Generally, lenders will closely look at your annual income and calculate whether you can successfully keep up with your mortgage payments.
Going on Layoff
The worst situation is a layoff. Going on layoff happens to many of us in during our time working. When performing your application to obtain a mortgage you need a paystub, and if on a layoff you will not be able to provide documents to this effect. This can cause a delay in your approval, as the lender will want to wait until you go back to work. If you are going on layoff get approved immediately before your job is impacted.
Moving from Sole Proprietor to Incorporation
We are all wanting to pay less in taxes. This is one of the main reasons a borrower will move from sole proprietor to incorporation. This move spells difficulties for certain lenders, but not all. The more information we obtain the more we can build a story around your borrowing power. We can use the stated-income programs available. Brokers when faced with this type of move will ask for 12 months of banking, proof of previous business ownership, and when you made the move to a corporation.
Same industry different pay
This type of job change is more favourable. A change in the same industry usually happens when a borrower wants to change to another position in the same industry and obtains a higher income. However, too many changes in jobs can impact the lender’s ability to approve the mortgage.
Different Industry change
This type of move is when someone changes their job completely. They were working at Tim Hortons and then moved to a different industry sector. This can be sorted out with a bit of history on the reason for the move. Providing a job letter showing full-time can help this situation.
Always consult a Broker/Agent when making a job change
Job changes always make lenders doubt your ability to pay your mortgage. It’s, therefore, worth considering delaying the start of your new job, self-employment or contract until after your mortgage has been successfully funded. Your employment history is often vital to a mortgage lender, and a change in a career can impact the way they view your affordability. Your loan could shift in the middle of the purchase, and the paperwork might get complicated.
