Changing jobs before loan settlement

[Melbear]

A friend of mine has just bought her first investment property. It's a house off the plan. It was supposed to be finished on the 8th December. They then had 3 weeks to settle.

She's been offered a job in another government department, and because she currently works in a government 'agency' (similar in all ways to the public service, with AGS etc. but not quite) she has to resign to take up the new job. She was planning on resigning on 5 Jan to take up the new job - same pay as what she's on now, so that's not an issue.

She's now been told that the house won't be finished until February. Her mortgage broker had previously told her that she should not resign until after settlement. This is now not really an option as she needs to 'move on'.

She's signing loan contracts this week (CBA).

The house is $350K (loan of around $330K), her and her boyfriend each earn around $80K pa. I would have thought that her boyfriend would qualify on his own if it came to that, but that because it's still government it wouldn't be an issue.

If she signs loan documents this week, do the bank actually ask any more questions coming up to settlement anyway? From my memory they don't, but as it's her first investment she really wants to make sure. I don't believe her mortgage broker has too much of an idea (Mortgage Choice), and she doesn't know how much experience this broker has anyway. I told her that I would ask you wonderful people.

 

[Peter_Tersteeg]

Technically speaking your friend should inform the bank of any changes to her circumstances prior to settlement.

If the loan is unconditional and she's got the loan offer documents in hand, it's unlikely that the CBA will do further employment checks.

Realistically speaking I've gotten clients loans recently who's employer has changed 2 weeks prior to the application with the CBA. Mortgage insurance was also involved. Properly resented and depending on the circumstances it's unlikely that there would be significant problems with full disclosure but it would cause delays depending on how close to settlement the deal is.

 

[tobe]

I had one that was casual 9 months, changed to self employed contractor, in IT after unconditional but before settlement. CBA asked for new payslips, sent up the invoices, and it got re approved..... It was still a tight deal, I scratch my head sometimes.

I would give the same advice as your broker though, and not to change jobs until after settlement. Its a liability thing, if I said everything would be fine, and it wasn't I would be in deep dodo.

 

[Alex P Keaton]

A friend of mine has just bought her first investment property. It's a house off the plan. It was supposed to be finished on the 8th December. They then had 3 weeks to settle.

She's been offered a job in another government department, and because she currently works in a government 'agency' (similar in all ways to the public service, with AGS etc. but not quite) she has to resign to take up the new job. She was planning on resigning on 5 Jan to take up the new job - same pay as what she's on now, so that's not an issue.

(CBA).

I think she could be ok if its another government department she is going to work at. She is still a public servant. Is it local, state or federal though? Is she moving from a permanent government job to another permanent government job. I think she would be ok, but dont take my word for it. I could be wrong. If she was leaving to take up a job in the private service I think its a different thing altogether. My mb told me that when the bank looks at someone in the public service they look at how long they have been there from when they started.

Her mb should know though.

 

[Rolf Latham]

Im with Kim, though everyine needs to make their own assessment, there is no right or wrong here


On another front, lets take this one step further

At what point do we need to NOT inform the lender of changes in our lives..................for eg2 years after settlemen and

we have a child
we take on more debt
we get divorced
we change jobs

Once the loan is assessed and unconditional AND mortgage docs signed off returned and accepted by the funder, there are usually no contract conditions that state we must inform the lender of such changes.

While Im a big believer in "responsible lending" if your friend were my client, id ask her..........how do you see your financial security in the future ? same, better, or worse, and then make a judgement call from there.

In this instance in any case, it would appear that the one income could support the lend.

ta
rolf

 

[Jamie_D]

I dont see an issue here...

If your friend is continuing in the same industry then the banks are quite happy to continue with funding.

I believe they would not need to re approve the loan unless there are any amendments etc in the application.

Get to to sign the loan contracts and also ensure she has a new job to go to, therefore sign new job contracts also prior to resigning.