Mortgage Blog

How to get a home loan

Jim Quist is the president and founder of NewCastle Home Loans. He has 20+ years of mortgage lending experience as a business owner, mortgage underwriter, and loan officer. Jim's goal is to help people buy homes.

Jim Quist is the president and founder of NewCastle Home Loans. He has 20+ years of mortgage lending experience as a business owner, mortgage underwriter, and loan officer. Jim's goal is to help people buy homes.

Moving out of state? What to know about buying a home and your mortgage

Packing up and moving out of state can be overwhelming. On top of all the tasks and organization you’ll need to accomplish, what happens if you want to buy a home in a different state?

Below, we’ll cover the topics to consider if you’re moving to a new state and how that would affect owning a home. Once you’ve got the numbers down, I’ll take you through some of the daily living considerations and potential difficulties in getting a mortgage out of state from your current residence.

State taxes to pay attention to.

Below, I selected four states where we currently work with homeowners in order give you an idea of what you’d want to make note of. As far as basics, you’ll want to look at income tax, sales tax, property tax, and estate tax (for some situations).

  • Illinois
    • Income tax: Flat rate of 4.95%
    • Sales tax: 6.25% - 10.75%
    • Average effective property tax rate: 2.30%
    • Estate tax rate: 0 - 16% (estate is exempt if valued below $4 million)
    • Collection rates vary depending on the amount, no estate tax below $40,000.
    • See table of estate tax rates here
  • Iowa
    • Income tax: 0.36% - 8.98%
    • Iowa has nine tax brackets, capping out at $70,785+ for 8.98%
    • Sales tax: 6% - 7%
    • Average effective property tax rate: 1.48%
    • Does not have an estate tax
  • Michigan
    • Income Tax: Flat rate of 4.25%
    • Sales tax: 6% statewide
    • Average effective property tax rate: 1.78%
    • Does not have an estate tax
  • Wisconsin
    • Income tax: 4.00% - 7.65%
    • You can check your WI income rate here
    • Sales tax: 5% - 5.6%
    • Average effective property tax rate: 1.95%
    • Does not have an estate tax

Variations between the county and state taxes.

With the above information, you can see each state has slight differences. But when you look closer into each state, you’ll also notice a huge variance based on the county and the town you live in.

For example, despite Wisconsin having an average effective tax that’s smaller than Illinois, there are many counties within Wisconsin that are significantly higher than Illinois. Be sure to research the local area you’ll be moving to in order to have a strong understanding of your pros and cons.

How does my job status play into getting a mortgage in a new state?

If you decide to move to one of the above states from any of the other above states while keeping your current job, you’ll come across a hidden benefit these states share: Reciprocity Agreement. This agreement allows you to live in state A, work in state B, and have your income taxed based on state A. This allows for a unique way to consider your potential move out of state. You can leave the state, keep your stable employment and income here, and then move to a state that has a lower cost of living while still providing you with all the necessities.

When you’re purchasing out of state, one of the first questions your lender will ask you is whether or not you have a job offer or if you’ll continue to work with your existing employer. If you’re talking to your loan officer, they’ll likely ask you this before you even apply for a mortgage. If you don’t have a new job lined up or a plan for how to stay with your current employer, this makes your income/job stability volatile - a word that should never be seen in conjunction with a mortgage request.

But with a plan in place, this won’t be a problem. Many jobs now offer remote employment. During the initial steps of processing your request for a pre-approval, we’ll request a verification of employment (VOE) from your employer. In this, they’ll answer questions about your income and the likelihood you’ll continue to be employed with them. With confirmation that you’ll be continuing with your employer despite moving to a new state, everything else will proceed as normal.

On the other hand, if you’ll be leaving your employer for a new job, you’ll want to make sure to get a signed offer letter from the new employer before applying for a new mortgage. We’ll need this before we’re able to issue your pre-approval, which allows you to put down a firm offer on your new home. It will also be important to continue working in a similar line of work that isn’t likely to end immediately. For example, if you’re leaving a job as an accountant to become a retail worker during the holiday season, this could be seen as unstable and would warrant additional review.

When in doubt, talk to a financial planner.

If you have more specific questions, you may want to reach out to a financial planner like Cheyenne Farrell with Northwestern Mutual. You’ll be in good hands with Cheyenne, and she’ll be able to help you navigate all the best benefits and potential pitfalls not considered here.

Cheyenne did not provide any of the information in this blog, so please make sure to speak to her or your preferred planner directly for financial advice. Although we are here to help, this blog is not meant to serve as a financial planner.

If you’re considering a home purchase in Illinois, Iowa, Michigan, or Wisconsin, be sure to reach out us here at NewCastle Home Loans so we can get you started on the right foot and make sure you qualify for everything that you need to purchase your new home. It’s easier than it seems to purchase out of state, the only way you’ll find out how easy is to reach out today!

Schedule a time to talkReferences:

Illinois Estate Tax:

Illinois Tax Database:

Michigan Tax:,4676,7-238-75545_43715-153723--,00.html

Reciprocity Agreement:

SmartAsset Illinois Tax:

SmartAsset Iowa Tax Rate:

SmartAsset Michigan Tax:

SmartAsset Wisconsin Tax:

Wisconsin Tax Rates:

NOTE: State laws are subject to change, and the above information may not reflect the most recent changes. Please check with the taxing authority of the state where you work to ensure that a reciprocal agreement is still in place between that state and your home state. The information contained in this article is not intended as tax advice, and it is not a substitute for tax advice.

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