Changing Jobs

There are cases where mortgage loan borrowers change jobs during the mortgage approval process.  Many folks realize that changing jobs during the mortgage approval process can cause mortgage closing delays but it is not the end of the world.  Every mortgage lender has different rules and guidelines when it comes to re-evaluating a mortgage loan applicant who changes jobs during the mortgage approval process.  Some mortgage lenders require a 30 day pay check stubs while other mortgage lenders will just require one pay period of  pay check stub.  Still, other mortgage lenders may accept an employment offer letter from the Human Resources Department of the new company stating and certifying the borrower’s new position, status, and salary.  Most mortgage lenders prefer that you make a lateral move in the same field.  For example, if you are an engineer and take on a new job as an engineer at a new company, there should be no issues.  However, there may be an issue if you change careers in a totally different field.  For example, if you are a mechanical engineer and change careers to become an insurance agent, the mortgage lender will want additional information that your new career as an insurance agent will likely to continue for the next several years and your income will also be stable as well.

1099 To W-2 income: Changing Jobs During Mortgage Approval Process

If you are changing jobs during mortgage approval process and go from a W-2 income status to 1099, you will not qualify for a residential mortgage loan.  For 1099 employees, you need a two year of 1099 employment to qualify for a residential mortgage loan.  However, if you go from a 1099 employee to a W2 employee, you can qualify for a residential mortgage loan as long as you can provide the mortgage lender 30 day paycheck stubs.

Gaps In Employment

As mentioned in the earlier paragragh, if the new employment is not related to the same field of work, mortgage lenders might have a problem because most mortgage lenders want two years of employment history in the same field of work or related field of work.  A detailed letter of explanation most likely will be required and you need to convince to the mortgage loan underwriter why they should feel secure in a new field of employment and why they should feel secure that your new job in your new field of work will likely to continue for at least the next three years.  If you had a track record for the past two years of overtime income and bonus income from your previous employer and the likelihood of your overtime and bonus income will continue with your new employer, the new employer’s potential overtime and bonus income cannot be used.  If you were to stay with your previous employer and not quit until your mortgage loan has closed, then you could have used the overtime and bonus income.

Changing Jobs During Mortgage Approval Process:  Not Recommended

Changing jobs during mortgage approval process is not recommended.  If you are planning on changing jobs, it is highly recommended that you either change jobs before or after the mortgage approval process.  Changing jobs during mortgage approval process will definitely cause delays on closing your real estate purchase mortgage loan or your refinance mortgage loan.  Changing jobs during mortgage approval process may potentially jeapardize your whole mortgage loan and your mortgage loan could possibly be re-underwritten.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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