Applying for a Loan? Don’t Change Jobs

Posted on Apr 4 2016 - 5:47am by Admin

Home Loan in Salt Lake CityWhen it comes to mortgage applications, leaving or changing jobs may negatively affect your chances of approval. This is because when considering a loan, mortgage lenders look at different aspects of your income, such as its amount, stability, and history. Changes in employment can mean changes in salary amount and permanency.

The amount and stability of your income, for the most part, influence the amount of the loan you will qualify for. If your job and salary changes, the lender has to re-evaluate your application all over again. Changing jobs will affect your approval chances and a significant time gap between jobs can cause your income history to look unstable.

Steady Income Source

It is important for lenders that borrowers have a reliable source of income to make sure that you can pay every month. Mortgage companies in Salt Lake City and the rest of Utah note that it is likely that you will get a faster approval if you have been in the same company for years and you have a good source of income. Changing jobs frequently, on the other hand, is a common red flag to lenders.

Bad Career Moves

The worst step you could ever take is to move from a salaried job to self-employment. The same is true when starting a new career field or taking a lower paying job. This will give you a difficult time in getting your loan approved. It would not be much of a problem, however, if you move to another job within your same field and get a higher pay.

Stay or Wait

While you may see job change as a path to a better future, this may affect your home loan approval. If you want to buy a home and apply for a loan, it is best to stay in your current job. If you see the need to change jobs immediately, you may want to wait a little longer when applying for a loan.

Lenders want to make sure that you have steady source of income so that you’ll not get behind on payments. A good down payment is also beneficial in the approval process.