Can I Qualify For A Mortgage With Less Than 2 Year Employment History?


Is 2 Year Employment History Mandatory To Qualify For Mortgage?

mortgage-underwriterTo qualify for a residential mortgage loan in the United States, mortgage lenders require a two year residential and 2 year employment history.  You do not have to have a 2 year employment history with the same job and you can also have gaps in employment as well as employment in different lines of work  but you do need an overall 2 year employment history.  For example, if you were employed as a cook from January 2010 until January 2011 and have been laid off until July 2013 but started a new line of work in July 2013 and are still currently employed with the job you started in July 2013, you will qualify for the 2 year employment history mandatory requirement even though you had a period of employment gap and have changed lines of work.  Besides a 2 year employment history, mortgage lenders require a two year residential history as well.

Exception To The 2 Year Employment History

There is an exception for not having a 2 year employment history and that implies for those home buyers who have been in school such as a technical school, junior college, college, graduate school, or professional school such as dental, medical, business, or law school.   In lieu of the two year history, mortgage lenders can take college transcripts and the time they were in school is counted towards work history.  For example, say a high school graduate goes to college for 4 years,  He then goes to medical school for another 4 years.  Let’s just assume that the student does not have a job and does not have any work experience.  The student graduates from medical school and gets a new job making $100,000 per year.  This medical student will qualify for a residential mortgage loan after providing 30 days paycheck stubs as a doctor even though he does not have a two year work history.  The prior two years he has been a full time medical school student will be counted towards his 2 year employment history requirement.

Recent Immigrants And Those Who Just Got Green Card

There are cases where people have lived in this country illegally where they just got their green card.  These folks may have been employed by an employer and have gotten paid cash in lieu of W-2 or 1099 wages.  Then they get a green card and continue on working for the same employer but now gets paid via W-2 wages and gets taxes deducted from their employer.  Technically, they do have a two year employment history, however, the work history that they have worked for their employer where no income was documented does not count and cannot be used towards the mandatory 2 year employment history requirement due to the fact that no taxes were deducted and the fact that they were in this country illegally.  The 2 year employment history time clock starts the date they have gained employment legally and their income is reported to the Internal Revenue Service.  These folks cannot qualify for a residential mortgage loan until they have 2 year employment history documented.  However, there is an alternative finance program for those illegal residents who have just gotten a green card or for those home buyers who just came to this country.  It is a portfolio mortgage loan program call the expatriate portfolio mortgage loan program and is available to qualified mortgage loan borrowers.

Expatriate Mortgage Loan Program Waives The 2 Year Employment History And 2 Year Residential History

For those illegal immigrants who just got a green card and are legal to work and those new immigrants who just got a job in this country, the Expatriate mortgage loan program is probably the only program that they will qualify for.  However, lending standards and guidelines are tough.  The expatriate mortgage loan borrower needs to put down 20% down payment and show proof of income from a U.S. company.  The maximum debt to income ratio is capped at 40%.  The expatriate mortgage loan borrower needs to show that he or she has assets and compensating factor.  A one year reserve of principal, interest, taxes, and insurance is required besides the 20% down payment.  The expatriate mortgage loan program are 30 year adjustable rate mortgages.  There are the 3/1 ARM, 5/1 ARM, and 7/1 ARM expatriate mortgage loan program.


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