Timing for buying a house and new jobs

February 28, 2021 9:26 AM

I am wondering which I should look for first: a new job or a house to buy.

I held Job A for nine years and Job B for five years, and have been in Job C for five years. Now I am interested in both buying a house and getting Job D. I have no estimate of how long either of these will take, but I am guessing finding and getting the right job might take longer than finding and getting the right house. Would the order I do this in make any difference to lenders?

Both jobs would be related, to some degree. The house and the current job are in the same city. The new job is planned to be done in the same city, remotely, with an employer who already has employees spread remotely across the country.

I have been at my current apartment for five years. From job ads that I have been looking at, I am hopeful that my salary could increase 25 percent.

My wife, who has also been at this apartment with me for five years, also recently left her job of five years for a job with an increase of more than 50 percent. Before that, she had been self-employed for about 15 years.

Our credit scores are both above 700. We plan to get a VA loan. The only other debt we have is two car loans at less than $200 each. We easily qualified for a mortgage a couple of years ago (we couldn’t come to an agreement with the seller), but I think we are now thinking in a somewhat higher price range.

posted by furtheryet to Work & Money (11 answers total)

It sounds like you would prefer to buy a house sooner rather than later, so you should start browsing and chatting with lenders to get a sense of your local market.

How much your precise salary matters will vary based on your location and the amount of money you want to borrow. If you're not in an expensive area, one income might be enough!
posted by yarntheory at 9:42 AM on February 28, 2021

I always assume a 25% chance of getting any particular job from a job listing. With that in mind, is there any chance that the Job D would cause you to relocate? Second, would Job D pay relocation?

If you are staying where you are no matter what, there's no real reason to wait to buy the house.

If you might relocate, then it's best to wait to buy a house.

But, if you might relocate, and in your industry they usually pay relocation benefits buying a house often gives you a larger relocation package, including help on closing your house and moving costs. Usually those benefits are greater for homeowners than renters.
posted by bbqturtle at 9:44 AM on February 28, 2021

Get the job first, so you know where to buy the house. Living close to your job is a key to happiness; don't let your life waste away commuting. And my father advised me to work West of my residence, so I wouldn't be driving into the sunrise in the morning, or into the setting sun in the late afternoon (advice I've only rarely been able to follow, maybe you'll have better luck).
posted by Rash at 10:13 AM on February 28, 2021 [8 favorites]

How far above 700 are your credit scores? For the best mortgage rates, you want them above 760.

I would do some online house browsing, then talk to some mortgage lenders and look at your budget and decide what kind of mortgage you qualify for and can afford. Find out if that works with your current salary. If so, go ahead and house shop now.

Personally if it were workable to buy now, I wouldn't want to hold off for a hypothetical future job.
posted by medusa at 10:25 AM on February 28, 2021

If you are sure the next job will be primarily remote and the commute doesn't factor in, I don't see why you can't buy the house now unless the perfect house is out of reach. Lending standards have tightened but hopefully you would not be buying such a big/expensive house that you would need a raise for it (this locks you in to having to maintain your higher salaries and doesn't give you room if one of you goes on leave for raising kids or illness). Go ahead and seek mortgage preapproval for a hypothetical amount tied to houses you would like in your area with the salary you have now; it doesn't need to be the one, just something in the right price range to get an idea if your price range is realistic for lenders. If you can get the house you want now, why wait? If not, you have more information and you can take more time to work on your credit score and find the raise you need to support a larger home purchase.
posted by slow graffiti at 10:33 AM on February 28, 2021

Response by poster: A few points:
* We are definitely staying in the same city.
* My job will most likely be remote.
* I have seen only about half a dozen current postings to apply for.
* One reason it might be good to get the job first is that I would like to use part of my pay increase to pay for packers. My wife would rather not have packers, but I think she would go along if it came out of my raise.
posted by furtheryet at 10:36 AM on February 28, 2021

You may possibly encounter problems if you switch jobs between making an offer and closing on the house. But even then, I think you'd be unlucky. Otherwise, if you can afford something you would like to buy on the salary you make now then go ahead and buy.
posted by plonkee at 11:05 AM on February 28, 2021 [3 favorites]

I think you and your wife need to do a more detailed joint financial planning session to see if you are ready for a house, and if so, how much house, regardless of new job with raise or not. Full service movers with packing are in the low thousands for a 2bd without a crazy itinerary that includes fitness equipment, pianos, etc. You and your wife are not on the same page about your financial picture or the costs of homeownership if you disagree on being able to afford full service movers that would probably cost $1-2K, a relatively tiny amount compared to down payments and annual maintenance costs on most houses. Sure it can't hurt to browse for jobs now, but it also can't hurt to run all the numbers together now, new job or not. The raise may not materialize if your local market for talent is not hot, so you might need to look outside your city at full-remote companies (there is a lot more of this now because of COVID and it generally works to the advantage of people in lower cost of living areas). I think you just need to gather more information on both fronts instead of asking yourself if you are doing things in the right order; the order may matter some or not at all and it depends on details you need to research more.
posted by slow graffiti at 11:07 AM on February 28, 2021 [6 favorites]

One consideration is tenure in your current job can impact getting an approval on your loan. I got my approval and then started shopping for a house, knowing how much I was approved for. During the loan approval process, they contacted my employer and confirmed my length of employment. Sure, it's probably a secondary factor, especially if you have the money for the down payment, but every bit counts. And if you start a new job first, then buy the house, when you are applying for the loan, you and your wife would both be in new jobs. A couple years ago when you were previously approved you were both in your then-current jobs for a few years. Again, it may not matter, but you may be able to ask a loan officer in advance how important that is.
posted by Meldanthral at 11:51 AM on February 28, 2021 [7 favorites]

Consider that housing stock is very very low right now in the US. If you are able, you may want to wait to purchase as you will have more options.
posted by raccoon409 at 12:31 PM on February 28, 2021

Buying a house with a recent job change can be a pain. Some lenders will require a bunch more hoops/documentation in securing the mortgage. As mentioned above, it's even worse if the job change takes place between offer and closing, but in my experience if the change was recent (ie within the past year), it can still be a sticking point.
posted by pixiecrinkle at 8:23 AM on March 1, 2021 [2 favorites]