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Should you change jobs while house hunting?

You’ve probably heard the collective wisdom that you shouldn’t change jobs if you’re on the hunt for a home. But is it true?

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For Amanda, the time was right to buy a house. At 30, she felt ready to take that next step: she was making more money at a new job, and she found a place she was excited to make her own. But Amanda worried that the new job that made buying a home more affordable could jeopardize her chances of getting a loan.

“Because my new job was in the same field, and my salary had increased, my loan officer said it wouldn’t be a problem,” says Amanda. She put 5% down on her home and used private mortgage insurance.

Movin’ on up

A job change within the same company or industry won’t have too much impact on your chances of being approved for a mortgage. Lenders look at the stability of your income to figure out if you are a decent lending risk. Logical job changes – those that increase your income and/or job level in a field where you have already proven yourself – shouldn’t raise any red flags.

When to be careful

That being said, job changes that make your income less predictable will make you seem like a greater lending risk. If you ditch your steady job as an accountant to become a freelance birthday party clown, your bank might give you the side-eye. That doesn’t mean you can never buy a house if you follow your passion for clowning – but a lender will likely want to see at least 2 years of reliable clowning income on a mortgage application.

Here are some cases where job changes are more likely to delay your mortgage loan:

  • Moving from a salaried position to one based on commissions or bonuses
  • Becoming a contract employee
  • Moving to a completely different industry or position
  • Frequent lateral job moves

The bottom line

Taking a new job won’t automatically complicate your ability to get a home loan. But keep your lender informed of changes and promptly provide any paperwork they might request.

One final note of caution: if you’ve already secured your home loan and have an accepted offer on a house, don’t take a new job before your closing!