Long Beach Home Buyer Tips
Changing Jobs Affects Your Ability to Purchase a Home
Don't Change Jobs Before Your Purchase
Salaried Employees
If you are changing jobs and are staying in the same industry at a higher level of pay, a job change should not affect your ability to qualify for a Long Beach home loan. The higher salary will help you better qualify for a mortgage. If you are considering changing industries, this will cause problems in qualifying for a mortgage.
Hourly Employees
If you are an hourly employee accustomed to working a straight forty hour week without overtime and are considering changing your job, this should not be a problem, if you stay in the same industry. If you are accustomed to earning overtime and the new position does not guarantee a certain amount of overtime, this could be a problem in acquiring a home loan.
Over-Time Hours
Since overtime is never a guarantee lenders will determine your overtime earnings based on an average of your last two years. If you change jobs there will be no track record so this would impact your ability to purchase a Long Beach home.
Commissions Employees
Mortgage lenders will average the commission portion of your income over a two year period. Changing jobs in a commissions environment, even if you stay in the same industry and sell the same service or product will negatively impact your ability to acquire a home mortgage. Your future earnings cannot be determined because there will be no track record from which to do so.
Self Employment
If you are self employed your lender will want to see a two year track record at the minimum before approving you for a Long Beach home loan. Self employed individuals generally deduct a tremendous amount of expenses from their earnings, which can also have a negative impact on your ability to qualify for a home loan. If you are thinking about changing to self employment before your home purchase, DO NOT DO IT! Buy the home first.
If your are considering incorporating your sole proprietorship, or are considering a partnership, you should delay that until you purchase your new home.
The best case scenerio is not to make any changes at all until after you have purchased your Long Beach home.
Home Buyer Tips - The entire 3 part series:
| Laurie MannyLong Beach Realtor (562) 212-5420 |
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Main Street Realtors Belmont Heights 244 Redondo Avenue Long Beach California 90803 |
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Laurie - this information is so important to the borrower - that and do not go buy a bass boat.... I should blog on that someday - the day the bass boat cost the buyer the house!
Laurie I could be wrong but I think if a person has tenure in a certain industry or field and he changes jobs within that industry he isn't gigged on that point by the lenders.
SORRY...guess instead of scanning I should read a little more carefully! You covered this point in your posting!
Can you say this louder?! Great advice. I preach this all the time. Also, people who go from salary to commission or self employment before a home purchase is also risky. Lenders really need the track record.
Thesa,
Don't tell me, one of your clients bought a boat and lost a house loan? If so, write the article please. Inquiring minds...
Danny, I see you are having a great conversation with yourself up there, lol.
Shekeria,
Amen. No changes if you want the loan. Make all the changes you want after you close the escrow.
Laurie these are great reminders, I have seen people make this mistake. Some feel once the credit check is over they can go on a buying spree. This is a point we should emphasise to potential buyers.
Jennifer, I thought it would be a good mini series. A little reminder as we are moving into busy season here.
We should have a contest of the rediculous purchases buyers have made on the way to the closing table. You know everyone has a story! Happy Easter Laurie!
Now that is a thought for an interesting contest. Happy Easter to you too Chris.