AgentMortgage

Buying dilemma: job change matters

Self-employment isn't only factor affecting mortgage approval
Published on Dec 14, 2009

"My wife and I are currently considering buying a new house, and I am considering changing jobs to earn a higher salary. I have been at my current job for five years. Rather than changing jobs, I am also considering the possibility of going into business for myself. Whatever I decide to do, should I do it before or after we buy the house?" The answer to your questions depends on how the action taken -- changing jobs or starting your own business -- will impact the way a mortgage underwriter views your income. Underwriters look at three dimensions of a borrower's income: the amount, which must bear a reasonable relationship to the borrower's payment obligations; the documentation for the amount, which is the evidence that the amount is what the borrower says it is; and the stability of the amount, which are the indicators that the amount reported will continue in the future. Changing jobs: Changing jobs may affect the underwriter's judgment about income stability...

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