Mortgage  Question?
Can You Qualify Mortgage if You Changed Jobs Recently?

Can you get a mortgage if you changed jobs recently? I am thinking about switching jobs so I can make more money and afford a home but I am not sure how this would affect my ability to qualify for a mortgage.

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

The short answer to your question is that it is definitely possible to get a mortgage if you changed jobs recently. In fact, for many applicants, changing jobs should not impact your loan application at all and may even help you qualify if you make more money at your new job. While most people who changed jobs recently can qualify for a mortgage, there are several points to keep in mind, including potential exceptions.

New job in same line of work with same type of compensation.  From the lender’s standpoint, in an ideal scenario, when you change jobs, your new job is in a similar line of work as your old job and your type of employment remains the same. For example, if you were a W-2 employee (salaried or hourly wages) in the retail industry in your old job, then your new job is also in the retail sector and you are paid the same way, but hopefully make more money. A job change that finds you in a similar line of work with the same compensation structure should have little-to-no impact on your ability to qualify for a mortgage.

New job in different line of work with same type of compensation.  If your job switch also involves changing the field in which you work -- for example you move from the retail industry to the information technology field -- this may cause some lenders to take pause but should also have minimal impact on your loan application. Some lenders like to see a certain length of job experience for borrowers that recently changed their line of work. This is relatively unusual, however, as most lenders are fine as long as you can verify your new employment and your compensation structure is the same.

New self-employed job.  If you switch from being a salaried employee to self-employed when you change jobs, this can create issue when you apply for a mortgage. The qualification and documentation requirements for self-employed applicants are usually much more challenging. Lenders usually require a two year employment history for self-employed borrowers although a work history of between one and two years may be permitted under certain circumstances. In short, if you are self-employed in your new job, you may need to wait before you can apply for a mortgage, depending on your individual circumstances.

Review our comprehensive overview of the employment history requirement for a mortgage

New job with a different type of compensation.  If you move from a job where the majority of your compensation is salary or wages to a job where the majority of your compensation is bonus or commissions, this can also make it more challenging to qualify for a mortgage. For example, if you take a new job as a salesperson and earn most of your income from commissions, lender guidelines usually require a one-to-two year job history for commission income to be included in your loan application, even if you are making more money at your new job. This is another example of when you may be required to wait to apply for a mortgage after changing jobs.

What if my new job has a trial or probationary period?  Some new jobs have an initial trial or probationary period before the job becomes permanent. For example, your new position may have a three or six month trial period to make sure that you can successfully perform the job responsibilities. Most lenders require that the trial or probationary period has ended before you can qualify for a mortgage.

What if I have a gap in between jobs?  Many people incur a brief gap in their employment when they change jobs. A gap of less than a month should not cause any issues for applicants. An employment gap of longer than a month but less than six months is usually permissible as long as you provide a written explanation for the break. In this case, most lenders require that you have been back to work for at least six months, and have a two year work history prior to the gap, to qualify for the mortgage. So depending on the length of the gap and when you started your new job, you may need to wait before you can apply for the loan. Please note that military service and formal education such as college or vocational school are usually considered employment when you apply for a mortgage. So if your employment gap was due to military duty or school, then the break should not affect your mortgage application at all.

To summarize, a job change usually does not negatively affect your ability to qualify for a mortgage but there are multiple scenarios that may require you to wait before you can apply. Because many borrowers actually change jobs so that they can make more money to afford a mortgage, we recommend that you consult multiple lenders to understand how their specific guidelines apply to you. You can contact lenders in your area by clicking MORTGAGE RATES We recommend that you contact at least four lenders as qualification requirements vary.

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About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR.  Harry is a licensed mortgage professional (NMLS #236752). More about Harry

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