Moving town - get mortgage quit job / find new job get mortgage

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mb82

198 posts

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#267943 19-Feb-2020 00:24

Moving to town an hour away, is it better to buy house and get mortgage first, then quit job or find new job first then get mortgage? What are your thoughts.

Why am I asking here.. obviously depends on the situation but interested to know peoples thoughts as they probably have more experience with mortgage's & moving towns than I do as I have done neither.

My thoughts are if I buy a house first I have a stable job with multi year history to obtain it with. But then there is the risk when I finally find a job in the new town, what if it doesn't work out and I end up with a mortgage and no job.

On the other hand, If I find a job in the new town first, I have heard in some cases mortgage lenders want you to have a 6 month + track record at your job, so I might not be able to buy a house for more than half a year.

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3192 posts

Uber Geek

#2423562 19-Feb-2020 00:55

Keep old house, rent it out. Move to new town, rent for a year make sure you like it and will stay. Sell old house, buy new house.

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mattwnz

19378 posts

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#2423563 19-Feb-2020 01:12

What are the towns, and relative house prices? What sort of equity do you already have? There are many many things to consider. I would get some professional advice on it.

mb82

198 posts

Master Geek

#2423566 19-Feb-2020 03:02

lxsw20:

Keep old house, rent it out. Move to new town, rent for a year make sure you like it and will stay. Sell old house, buy new house.

I don't have a house. Just a 20 + % deposit.

Handle9

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#2423569 19-Feb-2020 06:39

Which town are you moving to?

Batman

Mad Scientist
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#2423576 19-Feb-2020 07:23

Buy house first

timmmay

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#2423577 19-Feb-2020 07:24

I wouldn't buy a house before I'm 100% sure I've got a job there. In larger towns I would then buy keeping in mind commute time.

sen8or

1603 posts

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#2423644 19-Feb-2020 08:24

Personally, I would move and get a job first and rent for a while. Depending on what your requirements are in the new town, this will then let you get a feel for the area, schools, parks, shopping centres, quality of the neighbourhood etc etc without being tied to a house / mortgage.

Have you looked at the employment opportunities?

Banks won't necessarily shy away from lending with a short term employment if it is in an area you are experienced in, its only on complete career changes that they are more cautious.

We will be moving back up north in a few years to be closer to family, top on our list is employment opportunities then the housing market. Neither area we want to go to is cheap (Tauranga or Napier / Hastings) but we will rent first for a while before committing to a purchase.

BlinkyBill

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#2423645 19-Feb-2020 08:27

Keep your options open by renting, If you lock yourself in to a situation (mortgage, or job, or geography) you have fewer options available if you want or need to change things.

Geektastic

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#2423784 19-Feb-2020 09:56

I’m unsure why you’d move unless you had a job that was causing it or a job where it didn’t matter where you lived.

That aside, getting the mortgage now is more sensible unless you expect to earn significantly more when you move.

Finding a good broke might make the mortgage part easier and have good advice.

mb82

198 posts

Master Geek

#2424282 19-Feb-2020 22:49

Hmm, reason for moving towns is house pricing

I guess I should talk to the bank first and get an idea of how much I might be able to borrow, probably better than using online calculators.

Should I avoid letting them know / asking about the impact of a possible job change?

Will I run into any problems if the deposit is 30 - 60% (non gift).

Does the fact you may rent out a room have any impact? (I am not trying to max out my borrowing just wondering).

Handle9

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#2424293 19-Feb-2020 23:38

There's really not enough information here. If you buy before you move the bank will treat it as an investment property as you will not be an owner occupier.

Go to a broker or financial adviser, you need to have an open discussion with someone professional rather than drip feeding information on the internet.

tripper1000

1539 posts

Uber Geek

#2424581 20-Feb-2020 15:43

mb82:

Hmm, reason for moving towns is house pricing

I guess I should talk to the bank first and get an idea of how much I might be able to borrow, probably better than using online calculators.

Should I avoid letting them know / asking about the impact of a possible job change?

House prices are often a reflection of the local economy. If there is no work to be had in a town, house prices will tank. As other have alluded to, don't paint yourself into a corner - make a plan that has flexibility and options should new location/new job not work out.

A mortgage broker is a good person to discuss all your options with, without revealing your hand to the lenders.

Banks aren't silly - if you don't talk about the job change they will ask questions about commuting between current job and proposed purchase location.

Blurtie

432 posts

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#2424592 20-Feb-2020 16:05

Speaking from personal experience as someone who has moved around NZ a bit in the past 6 or so years (Wellington to Auckland, Auckland to Dunedin and finally Dunedin to Christchurch) I would mirror the previous posts of renting first before diving right in and buying a house. This gives you an opportunity to check out your new surroundings, areas you like, areas you want to avoid... We didn't buy a house until our most recent move to Christchurch..There are some cheap (compared to Auckland) houses down here. But just be careful that they're not equake damaged still - that's a whole another topic..

The moves were dictated by a mixture of jobs and my partners study needs; I wouldn't move to a new location without having lined up a job first. But maybe that's just my own personal risk preference. You haven't said what industry you work in, so unless you think there are a tonne of jobs waiting for you when you get to wherever it is you intend to move to, then I would suggest lining up a job first prior to the move (will also help with mortgage/rent payments).

mb82

198 posts

Master Geek

#2424731 21-Feb-2020 00:58

Does the fact you intend to rent out spare rooms have any bearing on mortgage applications or is that considered speculative?

Also, interestingly using these two calculators why does number of vehicles matter? I can understand some bearing extra service cost/rego but using a 50k income as an example the difference between having 1 and 2 vehicles is about $50,000 in borrowing power, seems bonkers to me, or is that just an example that online mortgage calculators are more of a toy than a real gauge of what you can borrow?

https://www.squirrel.co.nz/home-loans/mortgage-calculators

https://tools.anz.co.nz/home-loans/borrowing-calculator/

nickb800

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#2424734 21-Feb-2020 06:02

My understanding is that income from board is considered a bonus - lenders will want you to be able to service the loan comfortably on your own.

The car thing makes sense to me - repayments on $50k would be at least $2,600 a year - a similar figure to car ownership costs (if a little bit low, depending on usage). So it follows that if you're spending $2,600 on your car, that's $2,600 you can't spend on your mortgage. Also bear in mind that at $50k, the bank will be (rightly) assuming that most of your income will be going on basics/fixed costs. As income grows from there, borrowing power would increase non-linearly (e.g if $50k income means $30k spent on tax/basics, that leaves $20k for the mortgage. $60k income means more like $30k for mortgage. Roughly).

As to the relevance of mortgage calculators - when you meet in person with a bank/mortgage broker, they will probably do a detailed budget with you for all aspects of your spending and use that to determine how much you can afford to servicel/borrow. So the only tools are not the final word, but probably a good indicator.

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