Changing job before settlement

This is not an uncommon scenario and whilst it's been discussed in various forums over the years, it would be good to get a refreshed view/opinion on what the possible options are.

We all know that changing jobs before settlement will have significant detrimental impact to the loan application and is very likely to lead to loan rejection. However sometimes a person will be caught in this situation, particularly if settlement date cannot be influenced (eg. off the plan development).

My question is, if one is to continue pursuing options in this scenario, who are the lenders that are most lenient when it comes to applicants changing jobs just before settlement date? It could be that no new pay slip can be provided, or only 1 pay slip is available.

Lets assume same industry same job type, purely changing employers to seek a better pay.

Old discussed information available on the internet suggests that CBA may not care for as long as you show regular recurring income. Some have also said that ANZ can accomodate this for as long as you don't take a break between jobs.

What are people seeing in the industry these days? Thanks in advance!

 

Employment history as a lending requirement hasn't really changed recently. As you say, the CBA is one obvious choice, but there's plenty of lenders that are likely to be fine with the new role if you've got a history of similar work.

I would generally suggest that you wait until settlement before changing jobs. Some lenders will actively do employment checks even after the loan is approved. I've seen a case like this. The lender did proceed with the loan, but they indicated that had the applicant resigned prior to applying or had the loan been more than 80%, they would have refused funding.

 

Ive done several deals with NAB based purely on employment contracts with a new job starting at a later date. If starting prior to settlement, they'd accept it. Will need to run the rule via the BDM first, but they do this. In the main they're for graduates and people moving cities.

If you can provide an employment contract, sub 80%, it should be OK with more than just NAB though.

If you don't disclose it and they do an employment check at settlement, you could get into trouble. I've seen this happen before too. Note that some lenders do employment checks as standard part of requirement (Homeloans, FirstMac).

Cheers,
Redom

 

I remember my broker once saying that if you change jobs but not industries, you are mostly still in the green with the banks.

 

What type of trouble? Can they still cancel the loan and the sale?

 

They certainly can - leaving the purchase in an awkward position.

 

How does the situation change for lending above 80%? Are there any lenders that will play in this space provided an offer has at least been signed for a new job in the same industry?

 

Probably Cba and nab.

However - while it's possible it's certainly not an ideal situation and the bank might turn around and pull the approval.

 

how would a land+construction application go with these lenders (or others) if an employer provided evidence that an employee will be starting at a later date? how soon after settlement is a reasonable time to resume/begin work to satisfy the lender?

 

After settlement? as long as you keep the lender informed, there's no issue, after settlement you just need to continue to make the payments.

Are you suggesting settlement of the land and then re apply for the building loan?

There's a lot of reasons why you are better off applying for the land and house together, only one of which is exactly this, that your circumstances change.

The lender sees it as a new application, while you are now an existing customer to this lender, their policy would still apply in relation to minimum employment periods etc.

 

@tobe sorry to be clearer - mr and mrs abc wish to apply for a land and construction loan together while mr abc is on unpaid leave. Settlement is to occur 3 months prior to mr abc resuming work. Would this be considered under any circumstance?

Thanks

 

Perhaps. If it was Ms abc on unpaid maternity leave it would be fine with a couple of lenders. I haven't had that particular scenario recently so I can't speak from experience. It'd be difficult and need a letter from the employer along with enough cash to cover the repayments until he goes back to work.