Ever since COVID locked us down, many of us have looked to reinvent our relationship to our “work.” Remote gigs, side hustles, multi-state territories, and a strong Wi-Fi connection have changed how we “show up to the office” and how we structure our careers. So, what if you are in the midst of change and want to buy a new home, or even simply refinance the debt you already own?
Mortgage guidelines and terms are based on risk. How likely is this set of characteristics (a k a your life) to repay debt without default? Does the income look to be stable, continuous? Is it too new to rate, or can the level of cash flow needed to meet the monthly mortgage obligation be supported?
Good news: If you are getting a new job, it’s in the same line of work, AND you start on or before the first payment of your new home loan, you should be fine! Bad news: If there’s big changes in the structure of your pay (say, going from salary to all commission) or you have a big gap in employment between Job A and Job B, then expect more hurdles ahead.
Because underwriters have to look at the past and present to determine the likelihood of the future, if there is a big shift from what we used to do to what we are going to do, additional questions, information, and verifications may need to be produced to get a new mortgage — and yes, even if you already have one. This means that if you are looking to refinance, and that if how you earned money then is not how you earn money now, you may not get your new loan. Being self-employed, moving locations, and even shifting to more incentive pay from standard salary structures all have difference nuances when it comes to guidelines and opportunities.
While everyone should pursue their dreams without anxiety of how it might impact their future lendability, it is always key to ask questions if you are making big changes in your life and expect to finance property within a one-year period thereafter. Go for that dream job! Do what you love, and always move forward!
Austin Lampson is a licensed mortgage professional and branch manager of Origin Point Mortgage. She has spent the last quarter-century helping her clients balance math and emotion to achieve their financial goals. Reach Austin at (805) 869-7100, austin@austinlampson.com, or visit austinlampson.com.
