Landed a New Job? Thinking About Buying A New Home?

Read below to find out whether or not it’s the right time.

You’ve landed your dream promotion, or you’ve left your employer for greener pastures and found an amazing new gig. In either case, a new position is energizing, and many people see it as a new chapter in their lives. They want to make other big moves and might consider buying a new home to celebrate their new job (and hopefully a bigger paycheck.)

Watch Pricing and Rates Trends

In many markets across the country, residential housing prices have flattened. This is especially true in metro areas where the prices climbed steeply in the past few years. We’re now seeing a plateau and a slowing of the rate of increase, but the top areas are still seeing gradual steady price appreciation. In cities and towns with good school districts and easier commutes, people are relocating to enjoy the perks of their new, better-paying jobs.

As of April 2019, interest rates for 30-year mortgages are at a 12-month low. They are still historically very low compared to the past 40 years but are expected to rise in the coming months and years making now a good time to buy. Potential buyers with a new job should remember that even a small increase in rates can add hundreds of dollars to their mortgage payment, so they shouldn’t pass up a good opportunity if they find one.

Accept Relocation Assistance

Although unemployment is very low in the United States, relocation or “RELO” packages are still quite common. These packages often contain a range of employer-assisted help such as covering closing costs, providing moving services and working out lower commissions from real estate agents. Some of these might even help cover a lease-breaking situation or even storage costs while the employee is in transition.

For those that are offered these types of benefits, try gaining a better understanding of the area before buying a home. Consider a three or six-month rental in a desirable area, which allows people new to the area the freedom to explore the neighborhood’s amenities on their own time.

Don’t Overextend

There’s certainly a rush of excitement that comes with landing a job, especially if it comes with a hefty increase in salary. While home ownership is a great goal, if you do land a big raise, be sure not to overextend yourself. Do the math to see how the raise will impact your finances (after taxes) and see if there’s enough of a boost for a house or condo payment. Starting a new job often brings some stressors, so buyers should be certain they can handle the added pressure of finding and buying a new home.

The stability of a new job is not only important to the worker, but also to prospective lenders. A new position might impact the amount a lender is willing to lend and the specific terms. Of course, there are a number of factors that impact this decision, but it’s an important consideration for people starting a new job and diving into the home buying process. If your job is based on a traditional salary, then you’ll have less of an issue than someone in a commission-based position or a move to self-employment. Lenders are really looking for stability so they can measure your “ability to pay.” Your employment history and time frames might impact the type of mortgage you pursue, so talk to a lender or mortgage broker about the best options that fit your profile.

Buying a home is an occasion for joy and celebration. If the new position is filled with stress and uncertainty, then you’ll likely want to give it some time before adding home buying to your life. But if you’re getting a raise and relocating to an area with steady price appreciation and good schools, consider hiring a good realtor and taking the plunge.