When buying your first home in the Poconos, there are several things you should avoid during the mortgage process. One of the most important is changing jobs.

Why Changing Jobs Can Affect Your Mortgage

I understand that life happens. Sometimes a job change is unavoidable due to health concerns, family responsibilities, or another unexpected situation. However, changing jobs while purchasing a home can create complications because of the way an underwriter calculates your qualifying income.

Even if your new job pays the same or more, it does not necessarily mean the lender can use all of that income right away. FHA and conventional loans may also calculate and qualify income differently. A job change that works under one loan program may create a problem under another.

How Variable Income Can Be Calculated

For example, let’s say you are paid hourly and expect to work 40 hours each week. You may assume the lender will simply multiply your hourly rate by 40 hours. However, if your pay stubs show that you worked 38 hours one week and 36 hours the next, the underwriter may consider your hours variable and calculate your income using an average.

When you change jobs, there may not be enough history with the new employer to establish a reliable average. This can reduce the income we are allowed to use and potentially affect how much home you qualify to purchase.

How a Job Change Can Impact Your Loan

A job change can create a snowball effect. We may need updated pay stubs, a new verification of employment, additional documentation, or even a different loan program. If we originally qualified you using a conventional loan but now need to switch to FHA, or the other way around, the income calculation and other loan requirements may change. In some situations, we may have to restructure the entire loan to keep you qualified.

Why This Matters Before Closing

I am sharing this because I recently worked on a loan where a job change created significant challenges as we approached closing. We worked through it, but it made the process much more complicated than it needed to be.

Talk to Your Loan Officer Before Making Employment Changes

Before accepting a new job, reducing your hours, changing your pay structure, or making any employment decision while buying a home in the Poconos, please speak with your loan officer or mortgage broker first. A quick conversation could help prevent delays and protect your loan approval.

Advice for First-Time Homebuyers and Refinancing

This advice is especially important for first-time homebuyers, but it applies to anyone purchasing or refinancing a home. Until your loan is closed, avoid making major employment or financial changes without first checking with your mortgage professional.