In the Market For a New Job? You Might Want to Wait Till You Have a New House
A new career and a new house are two of the biggest changes your life can take.
They both involve searching, seeking, and adapting.
But, a new career and a new house have more in common than just a little hustle and bustle: changing jobs can actually affect - often negatively - your ability to buy a new home.
So, if you are out searching for something a little cozier, you might want to put the career change on the backburner while you consider the following: Determine how you are paid: If you are paid with a yearly salary or on an hourly basis, a new job shouldn't really hurt when looking for a new house.
This is, of course, assuming that you will make a comparable amount in your new job.
If you have a job where you are paid on commission, however, changing jobs can drastically affect you.
Banks and lenders use the past two years to figure out your income.
If you make your money based on commissions (or bonuses) - and suddenly switch jobs - they have nothing to base an average on.
This creates too much ambiguity for the banks and lenders to have faith.
If they don't think you will be credible, they probably won't be willing to back you.
Determine How Much You Work: If you have a job where you only work part-time, perhaps twenty or twenty five hours a week, it's a good idea to stay put until you have your new house.
The reason behind this is part-time jobs can be flimsy with hours: you might be working twenty five hours a week as a waitress but if you switch to a new restaurant, you might only be assigned fifteen hours a week.
On the flip side, if you work a lot of overtime, the same mantra applies: stay where you are.
When figuring out income, banks and lenders can use overtime hours that you've accrued over the past few years.
However, if you switch jobs, they can't use "potential" overtime hours.
Their thinking is that your new job might not be as liberal with overtime as your old one was.
Don't Go Self Employed...
at Least Not Yet: So, you're tired of the rat race and figure it's time to be your own boss.
Well, wait until you have your own house.
There are few job changes that are as risky as self employment, and mortgage lenders know this.
That's not to say that lenders don't want to help anyone who is self employed, but they typically like to see a strong two years of self employment before they will consider coming to you aide.
Other big changes, such as taking on a partner or turning your business into a sole proprietorship, should also be delayed until after you've purchased your new house.
They both involve searching, seeking, and adapting.
But, a new career and a new house have more in common than just a little hustle and bustle: changing jobs can actually affect - often negatively - your ability to buy a new home.
So, if you are out searching for something a little cozier, you might want to put the career change on the backburner while you consider the following: Determine how you are paid: If you are paid with a yearly salary or on an hourly basis, a new job shouldn't really hurt when looking for a new house.
This is, of course, assuming that you will make a comparable amount in your new job.
If you have a job where you are paid on commission, however, changing jobs can drastically affect you.
Banks and lenders use the past two years to figure out your income.
If you make your money based on commissions (or bonuses) - and suddenly switch jobs - they have nothing to base an average on.
This creates too much ambiguity for the banks and lenders to have faith.
If they don't think you will be credible, they probably won't be willing to back you.
Determine How Much You Work: If you have a job where you only work part-time, perhaps twenty or twenty five hours a week, it's a good idea to stay put until you have your new house.
The reason behind this is part-time jobs can be flimsy with hours: you might be working twenty five hours a week as a waitress but if you switch to a new restaurant, you might only be assigned fifteen hours a week.
On the flip side, if you work a lot of overtime, the same mantra applies: stay where you are.
When figuring out income, banks and lenders can use overtime hours that you've accrued over the past few years.
However, if you switch jobs, they can't use "potential" overtime hours.
Their thinking is that your new job might not be as liberal with overtime as your old one was.
Don't Go Self Employed...
at Least Not Yet: So, you're tired of the rat race and figure it's time to be your own boss.
Well, wait until you have your own house.
There are few job changes that are as risky as self employment, and mortgage lenders know this.
That's not to say that lenders don't want to help anyone who is self employed, but they typically like to see a strong two years of self employment before they will consider coming to you aide.
Other big changes, such as taking on a partner or turning your business into a sole proprietorship, should also be delayed until after you've purchased your new house.