There’s a lot to grasp when you’re anticipating the purchase of your first home. And, in no time, you’ll surely find that it’s a lot harder than you might have hoped. Stumbling blocks will be placed in your way, and you’ll need to navigate them successfully. We could do an entire article on the potential pitfalls, but we’d be here all day. Instead, we’re going to focus on a chosen topic: employment.
Yes, your employment status and the details surrounding it are crucial when it comes to buying a home. We’re going to talk about why this is, and the factors that go into it.
So, why is your job so important? It’s very simple. A mortgage lender will calculate your average income based on the amount of pay you have received over the last 24 months. If they don’t think that you’re going to be trustworthy, you’re not going to get approved. In general, you’ll be fine if nothing has changed over the past two years. However, if you’ve bounced between jobs or you’re anticipating changes shortly, it might be a little harder.
That doesn’t mean that you’re out of luck, though. If you seek help with a private home loan, you’ll often find that lenders are willing to compromise. You’ll still need as much proof as possible about your current circumstances. They’ll require this information to provide you with a quote that works for both you and them. It’s important to be honest, no matter what.
But, what’s the best career choice for you at this time? Is it right to switch jobs now, or should you wait until your home buying aspirations are put into practice? It all depends on the type of work you’re doing, the salary you’re getting, and the hours you work. Importantly, it’s not always a good idea to switch between part-time jobs with varying hours. Ideally, the lender wants to see a steady pattern. If you’re moving from a 40-hour per week job to a 40-hour per week job in another company, it shouldn’t be as concerning.
Also, lenders ideally prefer a salaried job to that of a self-employed freelancer, for example. It’s always beneficial to have a steady income that rarely fluctuates. This shows that you’re trustworthy to repay on time without issues, so keep this in mind.
Ultimately, it isn’t always possible to meet the demands of a lender. That’s why honesty and compromise are important if you want to succeed, whether it’s through a bank or private means. Interest rates might go up if your risk is higher, and you need to carefully think the decision through. If you aren’t willing to abide by those requirements, make it known. It’s much better to back out now than find yourself in a devastating financial position later on.
If you’re in the market for a home, it’s important to remember how important your job is to the decision. Before you go making any rash decisions, keep in mind that stability is a valuable asset.
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