New to Your Job? Here's Why You Should Wait to Get a Mortgage
by Maurie Backman | Published on Oct. 8, 2021
It pays to settle into a new role before applying for a home loan.
There are plenty of reasons to get a new job -- better pay, new learning opportunities, or doing work that's more interesting and fulfilling. If you're new to your job, you may find that it takes weeks, if not months, to get up to speed and feel comfortable in your new position. And it makes sense to hold off on getting a mortgage during that transition period.
Why it pays to wait
Your new job could work out really well, or it could end up being a poor fit. And unfortunately, until you've been at it for a while, there's really no good way to know. That's why it pays to hold off on buying a home until you're settled at work.
If you get approved for a mortgage and shortly thereafter realize your job is not working out, one of two things will likely happen. If you leave that job (and income), your lender may pull your home loan offer. Or you'll have to stick it out at that job, even if you're miserable.
How long should you wait to apply for a home loan when you're new to a job? A good rule of thumb is two to three months. That gives you enough time to overcome some of the rockiness that comes with a new role. It's also a reasonable amount of time to assess whether the job is working out. If, after two to three months, you feel settled at work and are convinced you're on board for the long haul, then you should feel more comfortable applying for a mortgage since you're more secure in your position and your income.
Another thing to keep in mind: Mortgage lenders want to see job stability when you apply for a home loan. Seeing that you've been at a job for a while gives lenders confidence that your income is steady enough that you can keep up with monthly mortgage payments. If you apply for a home loan when you've only been at a job for a couple of weeks, a lender may reject you on the basis of that alone.
It's common for lenders to request that mortgage applicants provide two consecutive months of pay stubs. And if you don't have two months of pay stubs because you're new, you may want to put your application plans on hold.
What if it's a new job at the same company?
If you've taken a new job with the same employer you've been with for years, things are a little different. In that case, a lender may not even realize that you've gotten a new job -- lenders don't dig into the specifics of your work so much as the amount and stability of your paycheck.
That said, even if you've gotten a new job within the same company, it could still pay to hold off on getting a mortgage. Say you've accepted a promotion that comes with a lot more work, but more money as well. If, after two months, you're unhappy because you no longer have a comfortable work-life balance, you may decide to forgo the extra money and go back to your old role. But if you've applied for a mortgage based on your new income, you could end up stuck.
A new job can be an adjustment no matter the circumstances. And waiting to settle in before applying for a mortgage is a move you might really benefit from.
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