Should you wait until a job transfer is complete before you apply for a mortgage?

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

Edited by Michael Jensen, Mortgage and Finance Guru

Updated October 20, 2020

Although your relocation does not need to be completed, it can be very helpful if the terms of your job transfer are finalized before you apply for a mortgage. As we outline below, there are multiple points to keep in mind if you are considering applying for a mortgage in a new city or state due to a job transfer.

First off, there is a difference between transferring jobs within the same company and changing companies. If you transfer positions or locations within the same company and there is no break in your employment, this is preferable when you apply for a mortgage. If you change companies and your new job has a probationary or trial period, then you are usually required to wait until that period expires before you are eligible to apply for a mortgage.

Another issue to keep in mind is if your new job changes your type of employment or how you are paid this can affect the mortgage process. For example, if you go from being a contract worker to a full-time employee, this can make it easier to get approved for a mortgage.

On the other hand, if you go from being a W-2 employee to a contractor or self-employed, you may be required to wait before you can qualify for the mortgage. If your type of employment did not change with your job transfer and you already had a two year work history, you should meet the employment requirement for the mortgage.

Additionally, if how you are paid changes and you go from being an hourly or salaried employee to being compensated primarily through commissions or a bonus you may be required to wait before you are eligible for a mortgage. If how you are paid remains unchanged following the job transfer then you should not need to wait before you apply for a mortgage. Lenders also want to confirm that you are employed on a full-time rather than part-time basis.

It is important to highlight that if your job transfer takes you to a new state, you need to work with a mortgage lender licensed in that state. We always recommend that you shop several lenders to find the best loan terms including the lowest mortgage rate and closing costs. You can start by contacting multiple lenders in the table below.

The final point to keep in mind is that selling your current home may be a condition to getting your new mortgage approved. Of course if you are currently renting, then this is not an issue but selling a home can certainly impact the timing of getting approved for your new mortgage.

Additionally, selling a home can be a lengthy process and there is no guarantee that you can sell your home for the price you want or need. This is especially important if you need the proceeds from selling your home to fund the down payment for your new home. This is also why in most cases it makes sense to have clarity on selling your current home before you apply for a new mortgage.

One potential solution if any of the issues outlined above applies to you is to wait until the details of your job transfer are finalized before you apply for the mortgage and get pre-approved in the meantime. Getting pre-approved accelerates the mortgage process and also enables you to identify and address potential issues before you submit your loan application.

In short, getting pre-approved gives you a significant head start after your job transfer is complete. Use our get pre-approved form to get approved for your mortgage. Our form is free, easy-to-use, no obligation and does not affect your credit. Plus, after your job change is official, you can apply for your mortgage with confidence.

Sources

"B3-3.1-01, General Income Information."  Selling Guide: Fannie Mae Single Family.  Fannie Mae, August 7 2019.  Web.