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Question for the mortgage brokers out there

Sho'Nuff

Sho'Nuff

Diamond Member
As many of you know, my wife and I are buying a house. Closing date is scheduled for the end of February. Everything has gone well so far, so it appears that the closing will happen on time.

That said, I was offered a new job last Friday. I would be doing essentially the same type of work (patent law practice), but I would be doing it for a small (but well established) law firm, instead of as in-house counsel for a corporation. The commute would be a bit longer (30-40 minutes each way), but my salary at the new job would be at least $15k/year more than what I make now.

My question is this. If I accept the job before the closing date, must I inform my mortgage broker? I do not want the new job to affect the loan application, but I also do not want to commit mortgage fraud. If it matters, I would not start working at the new position until after we close on the house.

update: I decided to tell our mortgage broker. He spoke to his lead underwriter, and they decided that the change in employment would not be a problem for their investor because it was for more money and still in the same line of work. However, they said that they will need documentation to support their finding in the file, namely a copy of the signed offer letter and my first pay stub (even if it is generated after the closing date).

All in all, not a bad outcome. I have to provide a little more paperwork, but the loan should still close on time.

And let me go on the record as saying that while my mortgage broker IS being a PITA generally, I am happy to see that lenders are doing the homework they should have always been doing.
 
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Yes you must inform them or it is considered fraud. Not sure what (I doubt any) legal ramifications it would have for you, but any material change in your financial situation needs to be reported.
 
soxfan said:
As many of you know, my wife and I are buying a house. Closing date is scheduled for the end of February. Everything has gone well so far, so it appears that the closing will happen on time.

That said, I was offered a new job last Friday. I would be doing essentially the same type of work (patent law practice), but I would be doing it for a small (but well established) law firm, instead of as in-house counsel for a corporation. The commute would be a bit longer (30-40 minutes each way), but my salary at the new job would be at least $15k/year more than what I make now.

My question is this. If I accept the job before the closing date, must I inform my mortgage broker? I do not want the new job to affect the loan application, but I also do not want to commit mortgage fraud. If it matters, I would not start working at the new position until after we close on the house.
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I had this same issue. I never got a clear answer, so I ended up postponing my departure a little bit to close on my refi, and then change. Like you, I was leaving for better stability and a few more $, but I just never got a satisfactory answer so I waited.

FWIW, it was with US Bank last year when rates tanked. They were hammered with applications, so it took almost 3 months to close. Since the issues were entirely theirs, they extended my rate lock indefinitely. I didn't want to introduce a factor that was "mine" and lose about a quarter of a point on the rate.
 
My understanding is that if your new job is in the same line of work (yours is) and especially if it involves an increase, it should not be a problem. But I would inform your mortgage broker if there is any chance they verify your employment just before closing, and could be told you have given notice you're leaving.
 
kranky said:
My understanding is that if your new job is in the same line of work (yours is) and especially if it involves an increase, it should not be a problem. But I would inform your mortgage broker if there is any chance they verify your employment just before closing, and could be told you have given notice you're leaving.
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Right, I believe FNMA regs allow a change of job (although I'm not sure in what timespan) if it is in a related field.

One thing to also consider is that they will do a verification of employment where they call the employer that you put down and verify that you are in fact employed there. Depending on how far along you are this may or may not have already been done. That said you will still sign papers stating your employment is accurate, it will be reflected on your final 1003 etc.

Knowingly signing that you work for x but you actually are employed at y would in fact constitute fraud. If they catch you with the VOE then you will have some explaining to do, and at worst will have to shop elsewhere for the mortgage and start the process all over. If they catch you after closing, then I doubt there would be any ramifications to you (there would be to them as it could render the loan unsalable).
 
Is this a conv or FHA loan? Just looked and FNMA has no minimum employment history at the current job, just verification of a stable and predictable income for the past 2 years. If you can still prove that then you're good. Also the VOE is done within 10 days of closing. So if you are outside that window then it's safe to assume they will be calling the employer you have listed for verification.
 
Here in the UK time served at current job lowers your risk in proportion to how long you been working there. So if he tells them he has changed jobs surely this may make him a bigger risk and the offer could be withdrawn or the rate increased?
 
jamesmcuk said:
Here in the UK time served at current job lowers your risk in proportion to how long you been working there. So if he tells them he has changed jobs surely this may make him a bigger risk and the offer could be withdrawn or the rate increased?
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Well sure, and it most certainly does make him a bigger risk. What if things at the new job don't work out? It is up to the lender to determine how risky they feel you are, and if they think that the change of employment right before close is risky then they don't have to give you the money.
 
UglyCasanova said:
Well sure, and it most certainly does make him a bigger risk. What if things at the new job don't work out? It is up to the lender to determine how risky they feel you are, and if they think that the change of employment right before close is risky then they don't have to give you the money.
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Hehe so the advise is then Ssssshhhhhhhhh lol 😎
 
soxfan said:
My question is this. If I accept the job before the closing date, must I inform my mortgage broker? I do not want the new job to affect the loan application, but I also do not want to commit mortgage fraud. If it matters, I would not start working at the new position until after we close on the house.
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Yes you must report this, it actually should have been discussed with you along with not taking out any big purchases.

Taking a new job right after buying a home is risky anyway.
 
alkemyst said:
Yes you must report this, it actually should have been discussed with you along with not taking out any big purchases.

Taking a new job right after buying a home is risky anyway.
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Depends on what you're doing. I mean, my bank had no issue, since I was going to the government. I still never got a very clear answer, though, so I ended up pushing my end date back until some time after the refi.
 
hehe you USA guys are so honest and straight - I am really shocked - I thought it was much more corrupt there but man ppl here wouldn't put this much thought in to it. I need to move over there it seems like a better place to be
 
jamesmcuk said:
hehe you USA guys are so honest and straight - I am really shocked - I thought it was much more corrupt there but man ppl here wouldn't put this much thought in to it. I need to move over there it seems like a better place to be
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Haha right, and hence our housing crisis that took down the world economy. 😛
 
i just refi'ed while changing jobs. well, i would've refi'ed and then changed jobs, but my mortgage company was slooooow. i started the refi process in August, but by the time they got around to verifying my employment (in late October), i'd already left my original company and was scheduled to start at my new company in november. they (the mortgage company) griped a bit, but all that happened was that my closing was delayed until i had 30 days under my belt at the new job. once i turned in the pay stubs, closing proceeded without a hitch.
 
UglyCasanova said:
Is this a conv or FHA loan? Just looked and FNMA has no minimum employment history at the current job, just verification of a stable and predictable income for the past 2 years. If you can still prove that then you're good. Also the VOE is done within 10 days of closing. So if you are outside that window then it's safe to assume they will be calling the employer you have listed for verification.
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IT is a conventional loan. 30 year fixed for $332k. We are putting 25% down and our debt to income ratio will be under 2 once the loan is closed (we presently have no outstanding debt).

Our commitment letter states that the mortgage broker will confirm employment within 3 days of closing. Since I won't be starting until mid march, I could give notice in late February (e.g., the day after we close). But that seems sheisty.
 
UglyCasanova said:
Well sure, and it most certainly does make him a bigger risk. What if things at the new job don't work out? It is up to the lender to determine how risky they feel you are, and if they think that the change of employment right before close is risky then they don't have to give you the money.
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I certainly understand that there is a perception that with a new job comes risk. But I presently work for a startup, and it is not doing well. The new job will be with a small, but very stable law firm (they have been in business for ~11 years). It is a huge improvement in stability, which is major reason that I like it (and why I started looking in the first place).
 
sjwaste said:
Depends on what you're doing. I mean, my bank had no issue, since I was going to the government. I still never got a very clear answer, though, so I ended up pushing my end date back until some time after the refi.
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This is what I have the opportunity to do. Push my end date back (heck, my notice date) with my current employer until after we close.
 
jamesmcuk said:
hehe you USA guys are so honest and straight - I am really shocked - I thought it was much more corrupt there but man ppl here wouldn't put this much thought in to it. I need to move over there it seems like a better place to be
Click to expand...

Lots of folks over here don't put as much thought into this type of thing. But I am a lawyer. If not informing the lender of the job change amounts to mortgage fraud, I risk losing a lot more than just the loan on a prosepctive house. I could lose my license to practice (i.e., my livelihood). No house is worth that.
 
davestar said:
i just refi'ed while changing jobs. well, i would've refi'ed and then changed jobs, but my mortgage company was slooooow. i started the refi process in August, but by the time they got around to verifying my employment (in late October), i'd already left my original company and was scheduled to start at my new company in november. they (the mortgage company) griped a bit, but all that happened was that my closing was delayed until i had 30 days under my belt at the new job. once i turned in the pay stubs, closing proceeded without a hitch.
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Interesting. If my lender insists on this, I might be giving notice to my employer much sooner than I thought. The start date at the new position is flexible.
 
soxfan said:
Lots of folks over here don't put as much thought into this type of thing. But I am a lawyer. If not informing the lender of the job change amounts to mortgage fraud, I risk losing a lot more than just the loan on a prosepctive house. I could lose my license to practice (i.e., my livelihood). No house is worth that.
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That was my thought too. Not anything will get you disbarred, but dishonesty will - and ignorance is even less of a defense for us.
 
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