There are many reasons to find a new job: better pay, new learning opportunities or a more interesting and fulfilling job. If you are new to your job, you may find that it takes weeks, or even months, to level up and feel comfortable in your new role. And it makes sense to put a stop to getting a mortgage during this transition period.
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Why it pays to wait
Your new job might work out very well, or it might end up not being a good fit for you. And unfortunately, until you’ve been working on it for a while, there’s really no good way to find out. This is why it pays off not to buy a house until you are well established at work.
If you get approved for a mortgage loan and soon realize your job isn’t working, one of the following two things is likely to happen. If you quit that job (and that income), your lender may withdraw your mortgage offer. Or you will have to stand firm in this job, even if you are unhappy.
How long do you have to wait to apply for a mortgage when you start a job? A good rule of thumb is two to three months. This gives you plenty of time to overcome some of the instability that comes with a new role. It is also a reasonable amount of time to assess if the job is working. If after two to three months you are feeling good at work and are confident that you will be on board for the long haul, then you should feel more comfortable applying for a home loan because you are more confident of your position and your income.
Another thing to keep in mind: Mortgage lenders want to see job stability when you apply for a home loan. Seeing that you’ve been working for a while gives lenders the assurance that your income is stable enough to meet monthly mortgage payments. If you apply for a home loan when you’ve only been working for a few weeks, a lender may reject you on that basis alone.
It is common for lenders to ask mortgage applicants to provide two consecutive months of pay stubs. And if you don’t have two months of pay stubs because you’re new, you might want to put your application plans on hold.
What if it was a new job at the same company?
If you’ve taken a new job with the same employer you’ve been with for years, things are a little different. In this case, a lender may not even realize you’ve gotten a new job – lenders aren’t digging into the details of your job so much as the amount and stability of your paycheck.
That said, even if you’ve gotten a new job with the same company, it can still pay off to delay getting a mortgage. Suppose you’ve accepted a promotion that comes with a lot more work, but also more money. If after two months you are not satisfied because you no longer have a comfortable work-life balance, you may decide to forgo the extra money and return to your old role. But if you’ve applied for a mortgage based on your new income, you might find yourself stuck.
A new job can be an adjustment no matter the circumstances. And waiting to settle down before applying for a mortgage is something you could really benefit from.