Salaried Workers - If your pay comes to you via a salary and you do not earn any additional monies from bonus, overtime or commissions, a job change should not create a problem for you. This is assuming you will not be changing lines of work (i.e. manufacturing to sales) and that you will be earning at or above your prior job's salary.
Read the about employees who are hourly workers, receive bonuses, overtime or commissions, work part-time, or are self employed here...
Hourly Workers - If your income is based on the amount of hours you work and you always work a regular schedule each week, changing jobs should not be an issue for you. Again, we must assume you will not be changing lines of work (i.e. manufacturing to sales) and that you will be earning at or above your prior monthly wage.
Bonuses - When a significant part of your income in your new or current job is based on bonuses, you may want to wait until after you have purchased your home to make the job change. This is recommended because we, as mortgage lenders, will rarely consider future bonuses as income unless you have a proven history of receiving such bonuses in the past (usually two years). When calculating your income ratios, we will average your bonus amounts over the past 24 months and use the lesser of the current year's average or the 24 month average.
Overtime - This works very similarly to bonus income and would, therefore, warrant a delay in employment change before buying your new home.
In the future, once I really get this blog going, I will talk about Commissioned Employees, Part-Time Employees and Self-Employment changes.
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