Buying a home is a milestone for many and requires careful planning and organization to ensure success. If you’re in the middle of a job change while also in the process of buying a home, it can be tricky to navigate. To make sure you get through the process without any major hiccups, it’s important to stay organized and keep your lender informed. Additionally, it’s best to stay in the same line of work and have a solid down payment saved up. Here are a few tips to help you navigate the process successfully when changing jobs in the middle of a home purchase.
Your lender will need to know about any changes to your employment situation. If you're planning to switch jobs while in the process of buying a home, make sure to have a job lined up with a comparable salary before making the switch. Your lender will likely need to re-verify your income and review your new employment offer letter. Throughout the process be sure to keep your lender updated and be prepared to provide any requested documents.
To avoid delays in the mortgage process, it's best to stay in the same line of work when changing jobs. For instance, if you're currently a teacher, you should look for another teaching job. You may still be able to get approved if you switch to a different job, but it could take longer and you may need to provide additional documentation.
With rising costs, saving for a down payment has proven rather tricky. In fact, 20% of millennials say that they have nothing in savings. However, experts recommend saving at least 20 percent of the purchase price saved up for a down payment will help your application and give you more negotiating power. A higher down payment can also help offset some of the potential risks associated with a job change.
When switching jobs and buying a home at the same time it is important to keep your credit scores in good standing. Having a good credit score will qualify you for lower interest rates and better loan terms. At the beginning of the approval process and just before closing, your mortgage lender will look at your credit reports to assess your creditworthiness and make sure you're a good candidate for a loan. Additionally, make sure to update your credit report after the job switch so the new job and income can be reflected. Keeping your credit score in good standing and your credit report up to date can help avoid any hiccups throughout the process.
Lenders also want to see a consistent employment history. If you've had a lot of job changes in the past, it could be a red flag to lenders as frequent job changes can impact your ability to pay back the loan. If you've been at your current job for a few years, it will make it easier to get approved.
It is no secret that buying a home can be challenging when you’re in the middle of a job change. To make sure you get through the process without any major hiccups, it’s important to stay organized and keep your lender updated with any changes. With careful planning, you should be able to get through the process without any major issues. Good luck on your home-buying journey!