Most homeowners and potential homeowners in Australia know that it’s best not to change jobs while trying to finance and buy a home. After all, one of the main factors that potential lenders are looking for in potential borrowers is financial stability.
But sometimes life happens. The ideal job comes up, enticing you away from your current role. Or maybe your partner is given a transfer leaving you to look for a new job in a new city. Whatever the reason, you now find yourself in the situation of changing jobs while buying a house.
Before you panic, changing jobs while buying a house is not the end of the world, or the end of your mortgage opportunities. There are many lenders out there who will lend to borrowers in your situation. But you do have to be prepared to do a little more legwork to improve your chances of getting a mortgage.
Tips for Changing Jobs While Buying a House
The first and most important tip for navigating changing jobs while buying a house is to be scrupulously honest and upfront with potential lenders. It might be very tempting to exaggerate the length of time you’ve been in your new role, but you should never mislead your lender.
Not only does this destroy any trust they might have in you as a borrower, lying on your mortgage application could have much further reaching consequences. Your home loan application could be denied. Or, if the lie is found out in the future, your home loan lender could call your loan in. Either way, you’ll be in a worse situation than if you’d told the truth in the first place.
Be a Good Saver
Demonstrating that you have good savings habits can go a long way to mitigating any difficulties you might face from changing jobs while buying a house. These savings habits go beyond just money in a savings account. What banks and non-bank lenders are actually looking for are ‘genuine savings’.
What is (or is not) genuine savings depends on the lender. But in general, it’s any savings that equals 5% (or more) of the purchase price of your home. These often include:
- Savings held or accumulated over at least three months
- Shares/managed funds held for at least three months
- Term deposits held for at least three months
- Contributions from First Home Super Saver Scheme
- Cash gift or inheritance funds held for at least three months
- Anything else that demonstrates good savings habits
Having genuine savings demonstrates your financial stability and builds trust between you and potential lenders.
Protect Your Good Credit
Having a good credit history can help you get over the hurdle of changing jobs while buying a house. By ensuring that your credit score is as high as possible, you demonstrate that you are a low-risk borrower, and that your job change is merely one part of your overall financial position. If you’re not sure what your credit score is, it’s pretty easy to check through online credit sources.
Watch Your Career History
While you may be changing jobs while buying a house, you still want to demonstrate that you have a steady, stable career history. In other words, you’ll want to show that you tend to stay in each job at least two years before making a change.
Recommendation From Your New Employer
Sometimes it can help a little bit to get a letter addressed to the lender from your new boss. This letter needs to assure the lender that the new role you are entering is secure and available to you for the long term. While this isn’t a huge game changer, it could be just the thing to push you over the edge and into a mortgage.
Speak to an Expert
Our single best advice when confronted with the situation of changing jobs while buying a home, is to speak to an expert. At Lending Loop, our experts understand that life happens and they’re able to help you find the best loans for your changing situation. There are lenders out there who are happy to lend to buyers in your situation, and at Lending Loop we know who they are and the best way to reach out.
Give us a call today at Lending Loop, and let’s see how we can help!