Change Jobs, Lose Bonus Income & LOSE HOUSE! It is usually 100% OK to change jobs at any time IF … borrowers are NOT dependent upon bonus, overtime or commission income to qualify.

    If, however, borrowers are dependent upon bonus, overtime or commission income to qualify for a loan (very common in today’s world), changing jobs can be a deal killer!

    This is the case even if the new job offers tremendous bonus income potential.


    Lenders require “a history” of bonus, overtime and/or commissions income from a borrower’s current employer before they can use the income to help a borrower qualify for a loan.

    I once blogged about a borrower who was on track to make almost $200,000 of income in the year we qualified him – and he thought he was a “slam dunk” because he had never made less than $175,000 over the previous five years.

    But – he had just started a new job, with a base salary of only $85,000 and no bonus or commission history with the new employer.

    So, we could only use his $85,000 base salary for qualification purposes, and that prevented him from buying a home altogether in his market.

    More recently, we have had a slew of borrowers switch jobs mid-transaction or just prior to getting into contract, and all of them were dependent upon extra (non-base) income to qualify.

    This is much more common nowadays too because millennials tend to switch jobs far more often than any of the previous generations.

    And again – job switches are usually not an issue … as long as lenders don’t need bonus income to qualify.

    FINAL NOTE: The above blog refers to W2/salaried jobs only. It does not refer to switching from a W2 job to self-employment, which almost always requires two years of history irrespective of bonuses, overtime or commissions.

    Jay Voorhees
    Founder/Broker | JVM Lending
    (855) 855-4491 | DRE# 1197176, NMLS# 310167

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