For the majority of people, changing employers will have no impact on their ability to qualify for a mortgage loan. However, for some homebuyers the effects of changing jobs can be disastrous to their loan application.

Salaried Employees

• Salaried employees who don’t earn additional income from various commissions, bonuses, or over-time, switching employers should not have any problems. Just be sure to stay in the same line of work.  Hopefully, you will be earning a higher salary, which will improve your qualifications for a mortgage.

Commissioned Employees

• If a large amount of your income comes from commissions, it is unwise to change jobs before buying a home. This is associated with the way mortgage lenders evaluate your income. They estimate an average of your commissions over the last 2 years.

• Changing employers contributes to an uncertainty about your future earnings from commissions. No track record exists from which an average can be produced. Even if you are selling the same kind of product with virtually the same commission structure, the underwriter cannot be sure that past earnings will accurately reflect your future earnings.

Part-Time Employees

• If you earn an hourly income but rarely work 40 hours a week, you are not advised to change jobs. It would be impossible to tell how many hours you will work each week on the new job, so there would be no way to accurately evaluate your income. If you stick to the old job, the lender can just average your earnings.

Over-Time

• Because all employers award overtime hours differently, it is impossible to determine your overtime income if you change jobs. If you stay on your current job, your lender will give you credit for overtime income. They will establish your overtime earnings over the last 2 years and then calculate a monthly average.