Starting a new job can be exciting—especially if the new position comes with a higher salary or better opportunity.

But if you’re also planning to buy a home, it can create an immediate concern:

“Do I need to wait before I can qualify for a mortgage?”

In many situations, no.

One of the most common mortgage misconceptions is that you need to work for the same employer for two years before you can qualify for a home loan.

That’s not how mortgage underwriting works.

Your employment history matters, but lenders are generally more concerned with whether your qualifying income is stable, documented, and reasonably expected to continue than whether you’ve had the exact same employer for two years. For example, Fannie Mae requires lenders to evaluate the borrower’s recent work history, but specifically allows a shorter employment history when positive factors support it. Its guidelines also state that frequent job changes can still represent reliable income when earnings remain consistent and predictable.

That means someone who started a new job last month—or in certain situations hasn’t even started the new job yet—may still be able to qualify for a mortgage.

The details matter.

Do You Need Two Years at the Same Job to Get a Mortgage?

No.

This is probably the biggest misconception surrounding employment and mortgage qualification.

You may hear:

“You need two years at your job before you can buy a house.”

What lenders are generally evaluating is your employment and income history, not simply the amount of time you’ve worked for one particular company.

Fannie Mae, for example, instructs lenders to evaluate whether the borrower’s work history demonstrates a reliable pattern of employment over the most recent two years. But it also explicitly allows a shorter history when there are positive factors that reasonably offset it.

So consider someone who has worked as an accountant for six years.

They leave Company A and accept a better-paying accounting position with Company B.

They’ve only been with the new company for three weeks.

That doesn’t mean their entire employment history suddenly became three weeks long.

The lender can look at the broader employment picture.

Changing Employers Is Different From Changing Careers

This distinction can be important.

Imagine two borrowers.

Borrower A

Worked as an engineer for five years and recently accepted an engineering position with another company.

Borrower B

Worked in retail for five years and recently became a commissioned real estate salesperson.

Both borrowers technically “started a new job.”

But from an underwriting perspective, their income situations can be very different.

Borrower A may have:

• A documented history of employment
• Similar job responsibilities
• Fixed salary or hourly income
• A straightforward transition between employers

Borrower B may have changed both the type of work and compensation structure.

That doesn’t automatically mean Borrower B can’t qualify.

It means the lender may need to analyze the income differently.

The source and structure of the income can matter just as much as the employment start date.

Can You Get a Mortgage If You Just Started a New Salaried Job?

Potentially, yes.

A new salaried position can often be relatively straightforward because the compensation is fixed.

Suppose you’ve worked in information technology for several years earning:

$75,000 per year

You accept a new salaried position earning:

$90,000 per year

You’ve only received one paycheck from the new employer.

The lender doesn’t necessarily need you to work there for another year or two before considering the new salary.

Instead, the lender can evaluate the current employment, compensation and overall employment history.

Employment income used for mortgage qualification must still be properly documented. Fannie Mae’s current standards require lenders to verify employment income used to qualify, which may be accomplished through borrower documentation, employer documentation, or an eligible third-party employment verification provider.

This is why a recent job change isn’t automatically a mortgage problem.

What If You Changed Jobs for a Higher Salary?

A higher salary can potentially improve your mortgage qualification.

Suppose your previous salary was:

$65,000

and your new salary is:

$85,000

If the new $85,000 salary can be used as qualifying income, your monthly qualifying base income could increase from approximately:

$5,417

to:

$7,083

That’s about $1,666 more qualifying monthly income.

Because your debt-to-income ratio compares applicable monthly obligations with qualifying monthly income, a legitimate increase in income can potentially improve your DTI and purchasing power.

But there’s an important distinction between:

fixed base income

and

variable income.

If your new compensation is a straightforward salary, the analysis may be relatively simple.

If a large portion of the new $85,000 compensation depends on overtime, bonuses, commissions or tips, the lender may not necessarily be able to use all of that projected income immediately.

What If Your New Job Includes Overtime, Bonuses, or Commission?

This is where starting a new job can become more complicated.

Suppose your new position pays:

$60,000 base salary

plus potentially:

$30,000 in annual commissions

You might reasonably consider that a $90,000 job.

Mortgage underwriting may not.

For Fannie Mae conventional financing, bonus, commission, overtime and tip income generally has a recommended two-year history. A shorter history may potentially be acceptable, but ordinarily not less than 12 months, when positive factors support using it.

So the lender may be able to use your new base salary while treating the anticipated variable compensation differently.

This is why someone considering a new job while buying a home should pay attention not only to how much the position pays, but how they’re being paid.

Moving from:

$75,000 salary

to

$50,000 salary + potentially $50,000 commission

might look like a substantial raise.

But it could actually reduce the income immediately available for mortgage qualification if there isn’t an acceptable history of receiving the commission income.

That’s one reason understanding how overtime, bonus, or commission income is treated can be particularly important when you’re changing jobs.

Can You Qualify Before You’ve Received Your First Paycheck?

In some circumstances, yes.

This is one of the more interesting parts of mortgage guidelines—and something many homebuyers don’t realize.

For certain Fannie Mae purchase transactions involving a principal residence and fixed-base income, an executed employment offer or contract can potentially be used even when the borrower hasn’t yet received a paystub from the new employer.

Under Fannie Mae’s current employment-offer rules, one option can permit a qualifying start date as late as 90 days after the note date, provided the transaction and borrower satisfy the applicable requirements. Additional financial-resource requirements apply when a paystub won’t be obtained before loan delivery.

In other words, in the right situation:

You may potentially close on the house before you actually start the new job.

That’s obviously very different from the common belief that you must work at the new employer for two years—or even several months—before getting a mortgage.

What Does the Employment Offer Letter Need to Show?

When an employment offer or contract is being used for qualifying purposes, the documentation needs to be more substantial than:

“Congratulations, we’d like you to join our team.”

For Fannie Mae’s applicable employment-offer provisions, the documentation must identify the borrower and employer and provide employment terms including the:

• Position
• Type of pay
• Rate of pay
• Start date

Certain transactions using future employment without a paystub before delivery require a fully executed and non-contingent offer or contract, and any applicable conditions of employment must be satisfied as required.

The exact requirements depend on the mortgage program and circumstances.

But the important takeaway is:

Not having started the new job yet doesn’t automatically mean you have to postpone buying a home.

It means the mortgage needs to be structured and documented correctly.

New Job Doesn’t Automatically Mean New Income History

This is the concept I want Michigan homebuyers to remember.

A lender isn’t necessarily looking at your employment situation and asking:

“How many months have you worked for this exact company?”

The bigger questions are:

What is your employment history?

What type of income are you receiving?

Is the income stable and documentable?

Can it reasonably be expected to continue?

Does the income meet the requirements of the mortgage program?

That’s why two people who both started jobs three weeks ago can receive very different answers.

One may have a straightforward salaried transition within an established career.

The other may have moved into a completely different occupation with compensation heavily dependent on commissions.

The start dates are identical.

The underwriting situations aren’t.

What If You Have a Gap Between Jobs?

A gap in employment doesn’t automatically prevent you from qualifying for a mortgage.

People leave the workforce for all kinds of reasons.

You may have:

• Been laid off
• Taken time off to care for family
• Gone back to school
• Relocated
• Changed careers
• Taken time between positions
• Experienced a temporary interruption in employment

The length of the gap, what happened before and after it, and the mortgage program you’re using can all matter.

For example, someone who worked steadily for eight years, took several months off, and then returned to a salaried position may present a very different underwriting situation than someone with a repeated pattern of short-term jobs and lengthy employment gaps.

The important point is that an employment gap isn’t automatically a mortgage disqualifier.

It simply may require additional analysis or documentation.

What If You Were in School Before Starting Your New Job?

This is another situation where the idea that everyone needs a traditional two-year employment history can create unnecessary confusion.

Consider a recent college graduate.

They’ve spent the last four years earning an engineering degree and have now accepted their first full-time engineering position.

Technically, they don’t have a two-year history of full-time employment.

That doesn’t necessarily mean they have to work for two years before becoming eligible for a mortgage.

Depending on the mortgage program and circumstances, time spent in school or training may help explain the borrower’s recent employment history.

For FHA financing, for example, HUD’s current handbook instructs mortgagees to verify the borrower’s employment history for the most recent two years and specifically permits documentation such as college transcripts when the borrower was in school during that period.

So a borrower could potentially go from:

College → New career → Homeownership

without waiting two years simply to establish time with the new employer.

The lender still needs to determine that the current income meets the applicable requirements, but being a recent graduate doesn’t automatically mean you’re unable to qualify.

What If You Changed Careers Completely?

Changing careers deserves a closer look, but it isn’t automatically a problem either.

Suppose you’ve worked in automotive sales for several years and then accept a salaried position in information technology.

You have changed industries and occupations.

The lender may want to understand the transition and determine whether the current income can reasonably be considered stable and likely to continue.

Factors such as your education, training, qualifications, employment history and compensation structure can become relevant.

A career change into a fixed salaried position may also be considerably easier to evaluate than a career change into income that is primarily variable.

For example:

Scenario A

Previous occupation: Automotive sales
New occupation: IT support
Compensation: $75,000 fixed salary

Scenario B

Previous occupation: Automotive sales
New occupation: Real estate agent
Compensation: 100% commission

Both borrowers changed careers.

But Scenario B introduces another major issue: there may not yet be an established history of receiving the new commission income.

That’s why mortgage qualification after changing careers is highly dependent on how the new income is earned.

What If You Go From Hourly to Salary?

Moving from hourly income to a fixed salary can potentially make the income calculation more straightforward.

Suppose your previous job paid:

$28 per hour

with hours that fluctuated somewhat throughout the year.

Your new employer pays:

$70,000 annually

as a fixed salary.

If the new salary satisfies the applicable requirements, the lender may be able to evaluate the current fixed compensation rather than simply averaging your old hourly earnings and assuming that’s all you’ll ever qualify with.

This can be especially important when a job change represents a promotion or career advancement.

A mortgage application doesn’t necessarily freeze your income at what you earned last year.

The lender’s job is to determine what income is eligible to be used now under the applicable guidelines.

What If You Go From Salary to Hourly?

Going the other direction isn’t necessarily a problem, but the details become important.

Hourly income can be particularly straightforward when the borrower has a clearly established number of hours.

But if the hours vary significantly from week to week, the lender may need to analyze the income history rather than simply multiplying:

Hourly rate × 40 hours × 52 weeks

For example, someone earning:

$35 per hour

might think their annual qualifying income is automatically:

$72,800

because:

$35 × 40 × 52 = $72,800

But if their actual hours regularly fluctuate below 40 hours per week, the income calculation may be different.

Fannie Mae specifically distinguishes fixed-base employment income from variable-base income and requires variable earnings to be analyzed based on their history and trend.

So when changing jobs, don’t look only at the hourly rate.

Look at whether the hours themselves are fixed, guaranteed, or variable.

What If Your Hours Vary at the New Job?

Variable hours can make a brand-new job more complicated.

Suppose you’re hired at:

$30 per hour

but your schedule could range from:

25 to 40 hours per week.

It’s difficult to establish qualifying monthly income simply by assuming you’ll always receive 40 hours.

Mortgage underwriting generally needs evidence supporting the amount of income being used.

This is another example of why the statement:

“I make $30 an hour”

doesn’t necessarily tell us enough to determine mortgage qualification.

We also need to understand:

How many hours do you work?

Are those hours fixed or variable?

What does your employment history show?

What have you actually been earning?

A borrower with a long history of variable hourly income may be able to demonstrate stable earnings through that history.

Someone who just started a brand-new variable-hour position may have less history available to support the calculation.

What If You Switch From W-2 to 1099 Income?

This can be a much more significant change.

Suppose you’ve worked for the same company for several years as a W-2 employee.

The company offers you an opportunity to become an independent contractor.

Your gross compensation may even increase substantially.

From your perspective, you may be doing essentially the same work.

From a mortgage underwriting perspective, however, the way your income is evaluated can change considerably.

Independent contractor income may be treated as self-employment income, depending on the circumstances.

Self-employed borrowers are generally evaluated differently because lenders may need to analyze business income, expenses, tax returns and the stability of the business.

Fannie Mae generally requires a two-year history of prior earnings for self-employed borrowers, although in certain circumstances a shorter history of at least 12 months may be considered when the borrower has a prior history of earning similar or greater income in the same or a similar occupation.

That means changing from W-2 employment to 1099 income immediately before buying a home can have a much bigger impact than simply moving from one W-2 employer to another.

This is something I would want to discuss before making the employment change, whenever possible.

What If You Become Self-Employed?

Starting a business while you’re preparing to purchase a home deserves the same caution.

You could have excellent credit, significant savings and a successful career—and still create an unexpected mortgage qualification issue by changing the source of your income immediately before applying.

Imagine you’ve earned:

$100,000 per year

as a salaried employee for five years.

You leave that job and start your own consulting company.

You’re confident the business will generate:

$150,000

during its first year.

That may be a fantastic career decision.

But mortgage underwriting generally can’t simply assume that the new business will produce $150,000 of stable qualifying income because that’s what you project.

The lender may need an acceptable history of self-employment income before it can be used.

If you’re thinking about both starting a business and buying a home, the timing of those two decisions can matter considerably.

What If You Receive a Promotion?

A promotion is generally much different from starting an entirely unrelated income source.

Suppose you’ve worked for the same employer for three years and are promoted from:

$65,000 salary

to:

$80,000 salary

The fact that you haven’t earned $80,000 for the previous two years doesn’t automatically mean the lender must qualify you using your old $65,000 salary.

Current fixed compensation may potentially be used when it satisfies the applicable income requirements and is properly documented.

This is another reason the “two-year rule” is so often misunderstood.

Mortgage underwriting isn’t simply:

Average every dollar you’ve earned for the last two years.

Different types of income are analyzed differently.

Fixed salary is not necessarily treated the same way as:

• Overtime
• Bonuses
• Commissions
• Tips
• Variable hourly income
• Self-employment income

Understanding those differences can make a major difference in how much home you may qualify to purchase.

What If You Receive a Raise Right Before Applying?

A legitimate raise can potentially be reflected in your qualifying income as well.

Suppose you were earning:

$70,000

and your employer increases your fixed salary to:

$78,000

If the new salary is documented and meets the applicable requirements, the lender may potentially use the current rate.

That doesn’t mean every expected future raise can be counted.

Telling your lender:

“My boss said I’ll probably get a $10,000 raise next year”

isn’t the same thing as having a documented current salary of $78,000.

Again, documentation matters.

What If You’re Starting a Job After Relocating to Michigan?

This is particularly relevant for someone moving to Michigan because of a new employment opportunity.

You might currently live in another state but have accepted a position with a Michigan employer.

You want to purchase a home before—or shortly after—you relocate.

Depending on the mortgage program, employment terms and start date, you may not necessarily need to:

Move to Michigan → Start job → Wait several months → Buy house.

An acceptable employment offer or contract may potentially allow the new income to be considered before you’ve accumulated months of paystubs, particularly when the income is fixed-base compensation and the transaction meets the applicable requirements.

That can make it possible to coordinate the home purchase much more closely with the relocation.

The key is planning the mortgage before the move, rather than assuming you’ll have to rent simply because the job is new.

Be Careful About Changing Jobs After You’re Pre-Approved

This is where a perfectly acceptable job change can still create a major headache.

A mortgage pre-approval is based on the information available when the lender evaluates your application.

That includes your:

• Employment
• Income
• Assets
• Credit
• Debts
• Proposed housing payment

If you change jobs afterward, part of that financial picture has changed.

Lenders also verify employment during the mortgage process, including near closing.

So if you’re under contract on a home and receive an attractive job offer, don’t assume you can accept it Monday and tell the mortgage company after closing Friday.

The new job might be completely acceptable.

But it needs to be evaluated.

A change from:

$80,000 salary → $95,000 salary

in the same field may be relatively straightforward.

A change from:

$80,000 salary → $45,000 base + commission

could be much more significant.

And a change from:

W-2 employee → self-employed

could potentially change the qualification dramatically.

The safest approach is simple:

Talk to your mortgage professional before changing jobs while you’re in the mortgage process.

Not because changing jobs automatically kills a mortgage.

Because we want to determine how the new employment affects the loan before you make a decision that may be difficult to reverse.

What If You Change Jobs During the Mortgage Process?

Changing jobs while you’re buying a home is not automatically a problem.

But it is something your mortgage professional needs to know about before the change happens whenever possible.

Remember, your mortgage approval is based partly on the employment and income that were documented when your application was underwritten.

If that employment changes before closing, the lender may need to evaluate the new job and determine whether the new income can still be used.

This can happen even if you’re receiving a substantial raise.

For example:

Current job: $70,000 salary
New job: $90,000 salary

At first glance, that looks like nothing but good news.

And it may be.

But the lender still needs to verify the new employment, compensation structure, start date and any other applicable requirements.

The situation becomes considerably more important if the compensation changes from something predictable to something variable.

For example:

Current job: $80,000 salary

New job: $55,000 salary + $40,000 potential commission

Your expected annual earnings may actually be higher.

But the lender may not necessarily be able to use that anticipated commission income immediately.

That’s why a job change during mortgage underwriting should never be treated as something you’ll simply explain afterward.

Do Lenders Verify Employment Before Closing?

Yes.

Borrowers are sometimes surprised to learn that employment can be verified again very late in the mortgage process.

Getting through the initial mortgage pre-approval doesn’t mean your employment situation is permanently locked in.

The lender needs to make sure the income being used to qualify remains valid.

So imagine you’re scheduled to close on Friday.

On Monday, you give your employer two weeks’ notice because you’ve accepted another position.

Even though you’re technically still employed on Friday, you’ve now disclosed that the employment supporting the mortgage is ending.

That could require the lender to reevaluate the income being used for qualification.

The new job might still work perfectly.

But you don’t want the lender discovering the change during a final employment verification days—or hours—before closing.

What If Your New Job Doesn’t Start Until After Closing?

This doesn’t automatically prevent the mortgage from working.

As we discussed earlier, certain mortgage programs may allow qualifying income from an acceptable employment offer or contract when the borrower hasn’t started the job yet.

But there can be additional requirements.

The lender may need to evaluate:

• The new employment start date
• Whether the position is salaried, hourly or variable
• Whether the offer is fully executed
• Whether there are unresolved employment contingencies
• Available financial reserves
• The timing between closing and receiving your first paycheck

That last point matters.

Suppose you close on your new home on:

September 1

but don’t start your new job until:

October 15

Even if the future income can be used for qualification, you still need enough financial resources to cover the period before your new income begins.

Mortgage guidelines can address this through specific reserve or financial-resource requirements depending on the program and circumstances.

So an employment offer can sometimes solve the qualification problem, but we still need to plan for the cash-flow gap between closing and your first paycheck.

What If Your New Job Has a Probationary Period?

A probationary period doesn’t necessarily mean you can’t qualify.

Many employers routinely describe the first 30, 60 or 90 days of employment as a probationary or introductory period.

The important question is what that condition actually means.

There’s a difference between:

“All new employees have a standard 90-day introductory period.”

and

“Your employment is contingent upon obtaining a required license that you haven’t received yet.”

If the lender is relying on an employment offer or contract before you’ve started working, contingencies attached to that offer can become particularly important.

The lender needs to determine whether the employment and income meet the applicable requirements rather than simply seeing the word “probationary” and automatically rejecting the loan.

What If Your Job Offer Is Contingent on a Background Check or Drug Test?

This can matter when you’re trying to qualify using future employment income.

A job offer may contain conditions such as:

• Background check
• Drug screening
• Professional licensing
• Verification of education
• Reference checks
• Completion of training
• Other pre-employment requirements

If the lender is using that offer to qualify you before you’ve actually started working, unresolved contingencies may affect whether the income can be used.

The simplest solution may be completing the employer’s requirements and documenting that the contingencies have been satisfied.

This is another reason to provide the actual employment offer to your mortgage professional early.

Don’t just tell us:

“I have a job starting next month for $100,000.”

Let us review the documentation and determine whether it supports the mortgage qualification.

Can You Buy a Home During a Job Relocation?

Potentially, yes.

Job relocations are one of the situations where future employment income can be particularly useful.

Imagine you’re currently living in Illinois and accept a salaried position in Michigan.

Your new employer expects you to begin work in six weeks.

You want to purchase a home in Michigan and move directly into it rather than:

Relocate → Rent → Start job → Wait → Buy

Depending on the mortgage program and your circumstances, it may be possible to qualify using the new employment and coordinate the home purchase with your relocation.

That can potentially allow you to:

Accept job → Get pre-approved → Find Michigan home → Close → Relocate → Start new job

instead of making two separate moves.

The details matter, particularly the start date, compensation structure and documentation of the new employment.

But a relocation by itself doesn’t mean you have to wait months before buying.

What If You’re Returning to Work After an Extended Absence?

Returning to the workforce after an extended absence doesn’t necessarily mean you’re starting from zero.

Someone may have stepped away from employment because of:

• Raising children
• Caring for a family member
• Education
• Relocation
• Personal reasons
• A temporary career break

When that borrower returns to work, the lender will evaluate the current employment along with the prior history and the requirements of the applicable mortgage program.

For example, FHA has specific guidance for borrowers who have been out of the workforce for an extended period and returned to employment. Depending on the circumstances, additional employment history following the return to work may be required.

This is an area where FHA and Conventional loan requirements can differ, so the mortgage program itself can affect the answer.

The important point is that an extended absence doesn’t necessarily mean homeownership is off the table.

It means we need to understand the timeline.

Can You Get an FHA Loan With a New Job?

Potentially, yes.

An FHA loan doesn’t require every borrower to have spent two years with the same employer.

FHA underwriting looks at the borrower’s employment and income history and whether the income being used to qualify meets FHA requirements.

A recent job change may be acceptable.

However, the details become especially important when there are:

• Employment gaps
• Frequent job changes
• Variable income
• Overtime or bonus income
• Commission income
• A return to the workforce after an extended absence

This is one reason comparing FHA vs. Conventional loans can be useful when a borrower’s employment situation isn’t completely straightforward.

The best program isn’t determined only by down payment or credit score.

Income and employment circumstances can matter too.

Can You Get a Conventional Loan With a New Job?

Yes, a new job can potentially be used to qualify for a Conventional mortgage.

As we’ve discussed throughout this guide, Fannie Mae’s guidelines don’t simply impose a blanket requirement that every borrower spend two years with the same employer.

The lender evaluates the borrower’s employment history and the stability and continuance of the income being used.

That can make Conventional financing surprisingly flexible for borrowers who recently:

• Changed employers
• Received a promotion
• Relocated for work
• Graduated and started a career
• Accepted a new salaried position

There are also specific provisions that can potentially allow an employment offer or contract to be used before the borrower begins the new job.

So if someone tells you:

“You can’t get a Conventional mortgage because you haven’t been at your job for two years,”

that’s far too broad of a statement.

We need to look at the actual situation.

Does Changing Jobs Affect How Much House You Can Afford?

It absolutely can.

Sometimes positively.

Sometimes negatively.

Suppose you’re currently earning:

$6,000 per month

and your qualifying debts total:

$2,700 per month

Your DTI is:

45%

Now you accept a new salaried position paying:

$7,500 per month

If the new income is eligible to be used and your debts remain unchanged:

$2,700 ÷ $7,500 = 36% DTI

That could substantially improve your mortgage qualification.

But imagine instead that the new job pays:

$4,500 monthly salary

plus substantial potential commissions.

If the commission income doesn’t yet have an acceptable history, the lender may initially have only $4,500 per month available as qualifying income.

The job that you expect to pay more annually could temporarily produce less qualifying mortgage income.

This is why looking at your new job through an underwriting lens before accepting it can be valuable when you’re planning to purchase soon.

Should You Wait to Change Jobs Until After Closing?

Not necessarily.

I wouldn’t tell someone to turn down a great career opportunity simply because they’re buying a home.

A new job may have no negative effect on the mortgage at all.

It could even improve the qualification.

What I would recommend is checking before making the change.

If you call your mortgage professional and say:

“I received an offer for a new job. Here is the offer letter and compensation structure. What happens to my mortgage if I accept it?”

we can analyze the situation before anything changes.

Maybe the answer is:

No problem whatsoever.

Maybe it’s:

The salary works, but we can’t use the new commission yet.

Or perhaps:

This changes you from W-2 to self-employed income, and that creates a qualification issue right now.

Knowing beforehand gives you options.

Finding out three days before closing does not.

What Documents Might You Need After Starting a New Job?

The exact documentation depends on the loan program and situation, but borrowers with recent employment changes may be asked for items such as:

• Recent paystubs
• W-2s
• Employment verification
• Employment offer or contract
• Documentation of salary or hourly rate
• Start date
• Previous employment information
• College transcripts or training documentation when applicable

Additional documentation may be needed when income includes bonuses, overtime, commissions or other variable compensation.

Don’t interpret a request for additional documentation as meaning there’s necessarily something wrong with the loan.

Mortgage underwriting is largely about documenting the information being used to approve it.

A new employment situation may simply require us to document more of the story.

The Timing of a Job Change Matters More Than Most People Realize

The question isn’t simply:

“Did you change jobs?”

It’s:

When did you change jobs, what were you doing before, what are you doing now, and how are you being paid?

Someone who changes from one salaried engineering position to another salaried engineering position a month before applying may have a relatively straightforward situation.

Someone who changes from salary to 100% commission three days before closing may have a much more complicated one.

Someone graduating from college with a signed employment contract may potentially qualify despite having little traditional employment history.

Someone moving from W-2 employment into a newly created business may need considerably more history.

They’re all “new jobs.”

But from a mortgage underwriting standpoint, they’re completely different scenarios.

What Should You Do Before Changing Jobs If You Plan to Buy a Home?

If you’re thinking about changing jobs and buying a home around the same time, the best thing you can do is evaluate the mortgage impact before making the employment change.

That doesn’t mean your mortgage should dictate your career decisions.

It means you should understand how the decision affects your financing before you make it.

Ideally, we want to know:

• Your current employment and income
• Your new position
• Your new compensation structure
• Your expected start date
• Whether there will be a gap between jobs
• Whether you’re remaining W-2 or becoming self-employed
• Whether any portion of the new income is variable
• When you’re hoping to purchase
• How much you’re hoping to spend

With that information, we can determine whether the new employment improves your qualification, has little effect, or creates an issue that needs to be addressed.

Don’t Look Only at the New Annual Income

This is probably one of the biggest takeaways from this entire discussion.

Suppose you’re deciding between two jobs.

Job A

Base salary: $90,000

Bonus opportunity: $10,000

Job B

Base salary: $60,000

Commission opportunity: $60,000

On paper:

Job A could pay $100,000

Job B could pay $120,000

If you’re planning to buy a home immediately after changing jobs, however, Job B doesn’t necessarily provide more qualifying income.

Without an acceptable history of receiving the commission income, the lender may not be able to use all of the anticipated $60,000.

That doesn’t make Job B a bad career choice.

It simply demonstrates that:

Expected income and mortgage qualifying income aren’t always the same thing.

The same concept applies to:

• Overtime
• Bonuses
• Commissions
• Tips
• Variable hours
• Self-employment income

This is why borrowers with non-salary compensation should understand how overtime, bonus, and commission income is evaluated before estimating how much home they can qualify to purchase.

Don’t Assume Last Year’s W-2 Determines What You Qualify For

The opposite misconception can cause problems too.

Some borrowers assume that because they earned $70,000 last year, lenders can only qualify them using $70,000 this year.

That’s not necessarily true.

Suppose you’ve received a legitimate promotion and your current fixed salary is now:

$90,000

The lender may potentially be able to use the current salary when it satisfies the applicable guidelines and documentation requirements.

Your prior earnings still help establish your employment history.

But mortgage underwriting isn’t simply looking backward and ignoring what’s happening today.

The lender is trying to determine what income is:

stable, documentable, eligible and reasonably expected to continue.

Don’t Quit Your Job Immediately After Getting Pre-Approved

A mortgage pre-approval isn’t permission to freeze your financial situation in place until closing.

It’s an evaluation based on your circumstances at that point in time.

If those circumstances change, the approval may need to be reevaluated.

That includes:

• Changing jobs
• Quitting a job
• Reducing your hours
• Switching from salary to commission
• Becoming self-employed
• Taking unpaid leave
• Adding substantial new debt

This is similar to why borrowers are generally advised not to finance a new vehicle or make other major financial changes while purchasing a home.

The lender is approving a particular financial picture.

If that picture changes, we need to make sure the mortgage still works.

Don’t Hide a Job Change From Your Mortgage Company

This is worth stating directly.

If your employment changes during the mortgage process, tell your mortgage professional.

Trying to make it through closing without mentioning the change isn’t a strategy.

Employment can be verified again during the loan process, and the lender may discover the change anyway.

More importantly, many employment changes aren’t actually a problem.

Something that could have been handled relatively easily can become a last-minute closing issue simply because nobody had enough time to document it properly.

I’d much rather hear:

“I just received a job offer. Can you look at it before I accept?”

than:

“By the way, I quit my job two weeks ago and start somewhere else after closing tomorrow.”

The first gives us time to plan.

The second gives us a problem to solve under a deadline.

How Long Should You Wait After Starting a New Job to Apply for a Mortgage?

There isn’t one universal waiting period.

That’s really the answer to the central question of this article.

Depending on the circumstances, you might be able to qualify:

Immediately after starting the job.

You might be able to qualify before you even start.

Or you may need additional employment or income history before some or all of the new income can be used.

It depends on factors such as:

• Fixed versus variable compensation
• W-2 versus self-employment
• Previous employment history
• Career changes
• Employment gaps
• Mortgage program
• Documentation
• Future employment start date

So if someone tells you:

“You have to wait six months.”

or

“You need two years at your new job.”

ask why.

There may be a legitimate reason in your particular situation.

But there isn’t a blanket mortgage rule requiring every borrower to work at the same new job for two years.

Frequently Asked Questions About Getting a Mortgage With a New Job

Can I get a mortgage if I just started a new job?

Potentially, yes. Starting a new job doesn’t automatically prevent you from qualifying. The lender will evaluate your employment history, current compensation, type of income and whether the income satisfies the requirements of the mortgage program.

Do I need two years at the same job to buy a house?

No. This is a common mortgage misconception. Lenders generally evaluate your employment and income history, but that doesn’t mean you must work for the same employer for two years.

Can I buy a house if I’ve only been at my job for one month?

Potentially. If your new income can be documented and satisfies the applicable mortgage guidelines, being with the employer for only one month isn’t necessarily a problem.

Can I qualify for a mortgage before starting my new job?

In certain circumstances, yes. Some mortgage guidelines allow an acceptable employment offer or contract to be used for qualifying before employment begins, subject to specific requirements involving the position, compensation, start date, documentation and financial resources.

Can I get a mortgage with an offer letter?

Potentially. An employment offer or contract may be usable in certain circumstances, particularly with fixed-base employment income. The documentation and transaction must satisfy the requirements of the mortgage program.

Does changing jobs hurt mortgage approval?

Not automatically.

Changing from one salaried position to another may have little negative effect and could potentially improve qualification if your income increases.

A change to variable, commission-based or self-employed income can require a different analysis.

Can I switch jobs after getting pre-approved for a mortgage?

You can change jobs, but you should speak with your mortgage professional before doing so. The new employment and income may need to be evaluated before the loan can close.

Can I change jobs after my mortgage is approved but before closing?

A mortgage approval is still subject to conditions through closing. If your employment changes, the lender may need to reevaluate the income used to qualify.

Don’t assume that because underwriting already approved the loan, employment no longer matters.

What happens if I quit my job before closing?

If the income from that job was being used to qualify for the mortgage, quitting can materially affect the approval.

Contact your mortgage professional before resigning whenever possible so the new employment situation can be evaluated first.

Can I get an FHA loan after starting a new job?

Potentially, yes. FHA loans don’t universally require borrowers to spend two years with the same employer. Employment history, gaps, current income and the nature of the new employment can affect the analysis.

Can I get a Conventional mortgage after starting a new job?

Potentially, yes. Conventional loans can allow recent job changes, and certain circumstances may even permit qualifying with an employment offer before the new job begins.

What if I just graduated from college and started my first job?

A lack of two years of traditional employment doesn’t automatically prevent a recent graduate from qualifying. Education or training history can be relevant when documenting the transition into employment, depending on the mortgage program and circumstances.

What if my new job pays commission?

Commission income can require an acceptable history before it can be used for mortgage qualification. You may still be able to use eligible fixed base salary while the commission portion is treated separately.

What if I changed from W-2 to 1099?

This can be a much more significant change because 1099 or independent-contractor income may be treated as self-employment income.

If you’re considering this type of employment change while also planning to purchase a home, discuss it with your mortgage professional beforehand.

Does a raise help me qualify for a larger mortgage?

It can.

If your qualifying fixed income legitimately increases and the new income can be documented and used under the applicable mortgage guidelines, the additional income may improve your debt-to-income ratio and potentially increase your purchasing power.

New Jobs and Mortgages: The Bottom Line

Starting a new job doesn’t mean you need to put your homebuying plans on hold.

In many cases, a borrower can qualify shortly after changing employers.

In some situations, a borrower may even qualify using an employment offer before the new job begins.

What matters is the complete employment and income picture.

A borrower moving from one stable salaried position to another is very different from someone moving from W-2 employment into a new commission-only position.

Likewise, a recent college graduate entering a salaried career shouldn’t automatically be treated the same as someone starting a brand-new self-employed business.

Mortgage underwriting looks deeper than:

“How long have you worked here?”

We need to understand:

What were you doing before?

What are you doing now?

How are you being paid?

Is that income eligible to qualify?

Can it be properly documented?

And ultimately:

Does the complete application support the mortgage you’re trying to obtain?

Thinking About Buying a Home After Starting a New Job?

If you’ve recently changed jobs, received an offer for a new position, relocated for work, graduated and started your career, or are considering changing how you’re paid, don’t automatically assume you need to wait before buying a home.

BrightSide Lending can review the employment change as part of your overall mortgage qualification and help determine which income can be used before you start making offers.

For Michigan homebuyers, that can be especially valuable before accepting a new position or making a major change to your compensation structure.

Sometimes the answer is that nothing changes.

Sometimes the new job actually improves your qualification.

And sometimes understanding the mortgage impact before making the employment change can prevent an avoidable problem later.