We are often approached by potential borrowers who are moving from one city/state to another and looking to get pre-approved for a mortgage. While this may seem straightforward and logical on the surface, it can actually be challenging. Relocating almost always comes down to stable employment/income. We have outlined some of the common scenarios here:
If you are already a full-time remote employee, relocating should not be an issue whatsoever. The only documentation you will need is a letter from your employer outlining that you can continue working remotely and confirming there will be no pay adjustment based on the new location. The letter from the employer will also need to acknowledge where you are looking to move.
Another example is if you already have another full-time job lined up in your new city/state. In this case, an executed job offer letter that outlines the compensation and anticipated start date should be satisfactory. While there are some nuances surrounding this option, most of the time this is not an issue.
A more challenging scenario is when you are looking to relocate but your employment is categorized as ‘hybrid’ work. If you are moving to a location considered not “reasonably” possible to commute you might get hit with an extra living/housing expense to account for when you have to travel back to the city where your office is located. Additionally, you will need your employer to confirm this move which restricts hiding this information from your employer.
The most difficult mortgage-qualifying scenario for relocation is if you are self-employed. It is strongly recommended that self-employed borrowers consult with a licensed Mortgage Loan Originator as there are many nuances. Determining whether you qualify comes down to how the business operates.
For example, if you run an online e-commerce business you should be fine since where you live has little impact on the operation. On the converse, you will likely run into mortgage qualifying issues if you are in a location-dependent profession such as a real estate agent, contractor, plumber, etc. The reason for this is that there is a presumption that moving to a new location will require the need to re-establish business income. Certain professions, such as lawyers, accountants, and insurance brokers can be exempt from the location dependency aspect.
Relocating can make qualifying for a mortgage is challenging as it is dependent on the specific circumstances and how well your employer is willing to cooperate. It is always recommended to inform your employer that you are considering moving when qualifying for a mortgage since it is impossible to avoid employment verifications.
Give us a call at (760)930-0569 to discuss your scenario if you are someone who is looking to move to a new location and looking to get a mortgage.
