Changing jobs can be an exciting new venture. It can mark a new stage in your life, brimming with opportunity. However, changing jobs can make things a little more complicated when you’re planning to buy a home.

How Can Changing Jobs Affect the Home Buying Process?

With all the moving parts in the home buying process, it’s no wonder some people choose to wait until their job situation is stable before shopping around for a home. Changing jobs can add a lot of chaos to the mix.

In order to purchase a home, you need to save up a down payment, qualify for a mortgage, obtain pre-approval and get an appraisal on your future home. The mortgage process can be long and tedious under the best of circumstances. Now imagine what it would be like if you had to do all these things while switching jobs in the midst of it.

Because home buyers have very limited time to buy a home before the interest rate resets, getting pre-approved and finding the right home quickly is of the utmost importance. In addition to all the rest of the moving parts involved in the home buying process, changing jobs during the process only increases the odds of your mortgage being rejected or delayed. Unfortunately, these things can happen even if you have a proven track record of employment and have other strong factors in your favor, such as a good credit score.

What to Consider When Buying a Home while Changing Jobs

If you need to buy a new home while you’re changing jobs, here are some things to consider:

1. How will the mortgage lender view your new employment situation?

The mortgage underwriting process is based on how much money you earn, how much debt you have, and how your income compares to your debt. The loan will be declined if the lender doesn’t feel that you can afford the mortgage. You may not get the opportunity to re-apply for the loan, which means that you’ll have to wait at least two years for a chance to buy your home.

2. How will the lender view your employment history?

When you have more than six months of unemployment, that may be considered a red flag by the mortgage lender. It will likely be considered a “time gap” in your employment history, which means that the lender may wonder what you did during this time. If you changed jobs during this time, you might be able to explain your situation to the lender. However, if you were unemployed, that could be a much bigger problem.

3. What if your new job is a step down financially?

Lenders want to see that you have a history of steady employment, so they will view the pay difference negatively. If you change jobs to take a lower-paying position, you might want to consider waiting until your next raise to buy a home rather than buying right now.

Final Thoughts

Don’t let your home buying dreams be derailed due to a change in your job status. It may be difficult to precisely time your home buying plans around a job change so that things work out. However, you can include some extra time in your home buying timeline to accommodate this in your plans.

Finance your home in Ontario with the help of Mills Financial Group. We are part of an award-winning Canadian mortgage brokerage with a national team of over 800 qualified and accredited mortgage brokers, agents and associates providing residential and commercial mortgage services. We will work with you personally to offer you valuable insight throughout the process, save you time and find the mortgage that best suits your situation. Start your application now!