America really isn't like it was in the "good old days," especially when it comes to mobility. People just don't keep the same old job anymore, workin' for three decades and then retiring on a pension. People today take other jobs every few years, move across town...and often move across the country.
If you're considering a transfer or are taking a new job with a new company far, far away there are a few things you'll want to consider when applying for a new mortgage.
The easiest transfer of all is simply a move from one location to another with the same employer. To finance a home in your new location, your lender will merely ask for a "transfer letter" from your employer stating that yes, you will have a new job in your new part of the country and you will be paid the same or more than you make now.
If you're not only moving across country but are working for a new company entirely, your lender will also want to obtain a few other items.
You'll need an "employment agreement" or similar contract showing when your new job starts, your position, and your new pay scale. This form is important because lenders usually ask for your two most-recent paycheck stubs covering thirty days to verifying current income. But -- if the start date at your new job and closing date on your new home coincide -- you won't have thirty days worth of paycheck stubs.
That's why your employment contract is important. In particular, if your new job pays considerably more than the old one, an employment agreement can help you qualify with that new and higher income.
But many households today are two-income applicants, and usually both incomes are needed to qualify for a new mortgage. What if one borrower gets transferred, the spouse doesn't yet have a job, yet you need the income of both to qualify? That's when "trailing spouse" income is used.
Trailing spouse income is used to calculate income requirements, even though the spouse doesn't yet have a job in the new town. Lenders have varying guidelines for trailing spouse income but most want:
- A track record of previous employment of at least two years.
- Employment in the same or similar line of work.
- Employment in an easily-employable field.
- An intent to work in the new town.
That's pretty much about it.
So if you get transferred or take a new job in another city, relax about the mortgage stuff. Just remember to take a few extra steps documenting your move and new income. And have fun in your new town!