Changing Jobs Before Closing Your VA Loan

Congratulations, you’ve made it! After all the hard work of serving our nation, you’ve earned your VA home loan benefits and found the perfect house. You’ve even gone through the pre-approval process. But what happens if a new, better job opportunity comes your way? It’s a question many Veterans face, and the answer isn’t a simple “yes” or “no.” While changing jobs is a common life event, doing so while in the middle of a mortgage application requires careful planning.

At VeteransLoans.com, we’re here to help you navigate this complex process. Let’s break down everything you need to know about changing jobs before you close on your new home.

Why Your Job Stability Matters to Lenders

When you apply for a home loan, including a VA loan, the lender’s primary concern is your ability to repay the mortgage. Your employment history and income are the two most critical factors they review. They look for stability and continuity to feel confident that you’ll have a steady income for years to come.

Your lender will perform a Verification of Employment (VOE), often more than once, to confirm your job and income. This is typically done when you first apply and then again just before closing—sometimes even within days of signing the final documents. Any changes to your employment status during this time can flag your application for additional scrutiny and, in some cases, delay or even jeopardize the loan.

The Golden Rule: Communicate with Your Lender

The single most important thing you can do if you’re considering a job change is to talk to your lender immediately. Don’t wait until the last minute. Being proactive and transparent will allow your loan officer to assess the situation and guide you on the best path forward. A surprise job change could be a dealbreaker, but an anticipated and well-documented one can often be managed.

Acceptable vs. Risky Job Changes

Not all job changes are created equal. Lenders, especially those specializing in VA loans, are often understanding of career progression. Here’s a quick guide to what’s generally seen as acceptable versus what might cause a problem.

Generally Acceptable Changes:

• Promotion within the same company: Moving to a higher-level position with the same employer is almost always a good sign. It shows career growth and, in most cases, an increase in pay.
• Moving to a new company in the same field with a salary increase: If you’re staying within your industry and your new job offers the same or higher pay, it can be viewed favorably. This is considered a lateral or upward move that demonstrates career progression.
• Shift from contract to full-time employee status: Securing a permanent position after a contract role is a positive change that shows increased stability.

Risky Changes:

• Switching to a different career field: A sudden shift to a completely new industry might raise concerns about your long-term stability and future income.
• Moving from a salaried position to a commissioned-based job: While a commission-based role might promise higher earnings, the lack of a stable, guaranteed income can be a red flag for lenders. They may require a two-year history of bonus or commission income to use it for qualification.
• Becoming self-employed or starting a new business: If you were previously a W-2 employee, becoming self-employed is a major change. Lenders will typically require at least a two-year history of self-employment income, which can halt your loan process.
• Taking a pay cut or a lower-level position: Any change that results in a decrease in your income will likely make it harder to qualify, as it could negatively affect your debt-to-income (DTI) ratio.

The Importance of Documentation

If you do change jobs, your lender will need updated documentation to verify your new employment and income. Be prepared to provide:

• Your new offer letter, clearly stating your position, start date, and compensation structure (salary, hourly, etc.).
• Your first few pay stubs from your new job. This is often a crucial step, and you may need to wait for these before your lender can proceed with final underwriting.
• A written Verification of Employment (VOE) from your new employer.
• An updated Leave and Earnings Statement (LES) if you are an active-duty service member.

The more information you can provide, the faster and smoother the process will be.

Special Considerations for Veterans

For Veterans, especially those leaving active duty, the transition to civilian employment is a unique situation. VA lenders are familiar with this process and have specific guidelines for how to handle it. If you’re transitioning out of the military and have a new job lined up, your lender can often use a non-contingent offer letter to qualify your income, provided that your start date is within a certain timeframe of closing.

VA loan income requirements are flexible and can consider various sources beyond just base pay, such as disability pay, child support, or retirement income. However, the key is always to demonstrate stability and continuity.

Our Promise to You

At VeteransLoans.com, we understand that life doesn’t stop just because you’re buying a house. We specialize in VA loans and have a deep understanding of the unique circumstances Veterans face. Our team is here to provide you with the personalized guidance you need to make the right decisions for your financial future.

If you have questions about your specific situation or need guidance on housing market trends or refinancing opportunities, we’re here to help. Don’t let a new job opportunity become a roadblock to your homeownership dreams.

Ready to Take the Next Step?

Ready to begin your journey to homeownership? Get started with our secure, no-obligation pre-qualification form.

Or, for a more personal conversation, feel free to give us a call at any time. Our VA loan experts are ready to assist you.