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Why Changing Jobs is Usually a Mortgage Killer
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Why Changing Jobs is Usually a Mortgage KillerDaniel Dobbs2022-12-17T08:49:34-08:00
Two of the biggest mistakes buyers make before they purchase a home/close escrow are:
1) Making a large purchase/taking on debt (usually a car) before closing escrow on their new home
2) More importantly, is making a job change!
If your client is dependent upon bonus, overtime, or commission income to qualify for a home loan, they must have a 2-year history at the same company to get credit for those income streams(s).
For example, A RN works ten years at Kaiser, and in addition to their base salary, they receive a “shift bonus” and overtime”; we can use all of these income streams.
However, if the RN changes jobs and is on the NEW job for LESS than two years, the underwriter will only use the base salary of the RN; because there’s not a 24-month history of the money on the new job.
If the RN’s base salary is all that’s needed to qualify for the mortgage, then no worries, “pass go” and pick up your commission check.
It’s patently unfair, but the rules are the rules after the Great Recession from 2007-2012.
The moral to this story: Consult with your MLO before taking on new debt or changing jobs before buying a home.
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Brea, Ca. 92821
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