Changing Jobs - does it affect your chance of getting a mortgage?

[Nir]

Hi Everyone,

Does changing jobs affect your chance of getting a mortgage? or, as long as you can prove an income that`s fine (assuming you meet all other criterias)?

In other words, is there a minimum period of time the bank might expect you to work for the current employer or is it not at all an issue if you only work, say 2 weeks for the current employer, but worked in the past 10 year for the previous employer (meaning was employed for a long time).

Also, is it an issue for the bank if you were not working for a while, say 2 months, while between jobs?

Lastly, is the cause of leaving your previous employer moving to the new employer important for the bank (i.e. been fired VS. personal choice VS. released without cause due to restructuring for example)?

THANKS,
Neil

 

[markl]

Hi Neil,

From what I remember you cannot get a mortgage while you are on probation with a company.

Regards,

 

[Nir]

Hi Mark,

Is there a standard probation period in Canada, like 3 month, or does it depend on the employer?

Does the bank assume a standard probation period (i.e. 90 days) or are they actually contacting the employer to find out?

Thanks & Regards,
Neil
ps. I got your newsletter about mortgages and how to work with the bank.. very interesting!

 

[Thomas Beyer]

banks look at the last 3 years of income statements filed with CRA .. and current job`s salary .. and if substantially LOWER or HIGHER may make adjustments .. usually they use a 3 year average of income ...

tell the situation to your mortgage broker .. he will explain in more depth ..

yes, if you jump between jobs a lot they might not lend you what you think you deserve ..

remember the golden rule: he who has the gold, makes the rules !

hence, work on a full application incl. networth binder that shows all your assets, liabilities ..

 

[RobMacdonald]

Typically, the banks look for a 3 year job history, and overall are looking for consistency. If you change jobs frequently, it`s not that you won`t get financing, it`s just that the loan may be considered slightly more risky.

If you`ve just started a new job, the key will be the length of your probation period. Most banks will want yyou to have passed probation, but some will consider an excpetion, if you new employment is in the same industry, and the reason for leaving makes sense.

If you`ve had a history of flipping jobs, and changing indsutries, then you may have difficulty getting approved.

The gap between jobs shouldn`t be a big concern, provided there is a good explanation.

 

[Nir]

Thank You Thomas and Rob,

One thing I forgot to ask on the same topic is if you get a nice severance package of 6 months salary (around $40,000), how are banks considering that?
Is there a good chance to be approved for a mortgage based on that package even before finding another job (while between jobs)?


Regards,
Neil