How Employment Changes Can Affect
Your Home Loan
In the last video
blog, we discussed how credit and debt ratios could have a negative
impact on your ability to close on your home loan. Another factor to
consider is employment status change.
Consistency is key
during the underwriting process and any inconsistencies will impact
the process. Employment status and the associated reliability of
income are critical for an underwriter’s assessment. Changes in
employment can either call this reliability into question or
strengthen it.
Not all change is
negative; there are some situations where changes in employment
status can be helpful to the underwriting process. A promotion or
wage increase will positively influence the underwriter’s
assessment and could help to close your loan more quickly.
Other changes can be
detrimental to your ability to close. A reduction in hours or to stop
working completely during the underwriting process raises red flags
and can have an unfavorable effect on the process.
A change in
employers can also lead to unforeseen consequences. Even if your
income is increasing, the questionable timeframe for receiving your
first paycheck can be concerning to underwriters.
Sometimes change is
inevitable, and when it does occur, transparency is crucial. Keeping
your loan originator informed is the best way to navigate the process
together and alleviate any confusion when changes occur.
