# changing employment before closing - urgent



## pnky (Jul 16, 2012)

My wife and i are in fulltime jobs. We recently bought a house and are closing the purchase in December. Our finance (80%, we are paying 20%) has been approved.

I have a lucrative opportunity at a local firm here, it is a one year contract. It starts right away.

Will it make a difference if I switch jobs now ? Is there a chance that it can cause me a problem with disbursal of funds on the day of closing ?


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## MRT (Apr 8, 2013)

*As long as your approval is 100% complete*, you will be fine.

It will not cause problems on the day of closing, as no one re-verifies your income/employment after your approval is done.

I would just confirm that with your bank/broker. Sometimes, when an approval has been done way in advance (e.g. new construction or a long closing), the lender will ask for a current pay stub or two closer to the closing date, just to confirm current employment...so as long as that is not the case with you, and your complete approval was recent, then this wouldn't be a concern.


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## pnky (Jul 16, 2012)

MRT said:


> *As long as your approval is 100% complete*, you will be fine.
> 
> It will not cause problems on the day of closing, as no one re-verifies your income/employment after your approval is done.
> 
> I would just confirm that with your bank/broker. Sometimes, when an approval has been done way in advance (e.g. new construction or a long closing), the lender will ask for a current pay stub or two closer to the closing date, just to confirm current employment...so as long as that is not the case with you, and your complete approval was recent, then this wouldn't be a concern.


That is helpful, thanks


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## Rusty O'Toole (Feb 1, 2012)

As a rule, lenders want to see a year of employment. If you change jobs during that year it is OK as long as it is a similar job. If you went from serving coffee at one Tim Hortons to serving coffee for another, that is OK. If you go from working at Tim Hortons to becoming a computer programmer for 3 times the money it's no go. I don't get it but that is the rule.


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## Eclectic12 (Oct 20, 2010)

Rusty O'Toole said:


> ... If you change jobs during that year it is OK as long as it is a similar job. If you went from serving coffee at one Tim Hortons to serving coffee for another, that is OK. If you go from working at Tim Hortons to becoming a computer programmer for 3 times the money it's no go.
> 
> I don't get it but that is the rule.


Interesting ... my best guess would be that if it is a considered a similar job - the risk of one being fired (cutting the income) would be seen a little. Changing to a different job, on the other hand, would have a might higher risk as it's something new.

I'd have thought the higher salary would help though ...


Cheers


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## Rusty O'Toole (Feb 1, 2012)

pnky said:


> My wife and i are in fulltime jobs. We recently bought a house and are closing the purchase in December. Our finance (80%, we are paying 20%) has been approved.
> 
> I have a lucrative opportunity at a local firm here, it is a one year contract. It starts right away.
> 
> Will it make a difference if I switch jobs now ? Is there a chance that it can cause me a problem with disbursal of funds on the day of closing ?


Not if you don't tell them.


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## MRT (Apr 8, 2013)

The overriding objective is to mitigate risk of default.

To ensure reliable employment/income, lenders typically want permanent, full-time employment, with any probationary period to have expired prior to the closing date. Anything else requires additional consideration, such as a history of income for 2-3 years, or even a co-borrower or guarantor.

That is the main issue with changing jobs just prior to your closing date, as it is likely that any probationary period will not have expired. This obv presents additional risk to the lender, as the person could be let go for essentially no reason during probation.

In OP's case, the concern would be that it is a 1yr contract position. That isn't necessarily a non-starter though. It would depend on the nature and field of the new job, how easy it would be to find another position after that contract it up (if it is non-renewable), etc.

Regardless of the circumstances, it almost certainly isn't worth rocking the boat and jeopardizing the deal. I'd keep quiet.


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## YYC (Nov 12, 2012)

Rusty O'Toole said:


> Not if you don't tell them.


This. If you are moving from full time to contract work, do not tell them. It will likely cause problems if you do. Lenders (generally speaking) hate contractors relative to employees, even if you are making a lot more money.


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## alingva (Aug 17, 2013)

MRT said:


> *As long as your approval is 100% complete*, you will be fine.


 true


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