Gaps In Employment In Past 2 Years
Gaps in employment happen to the best of us. Most workers who transfer jobs voluntarily due to a better position or employment offer do not experience gaps in employment. They just time the start of the new employment with the resignation of the current employment so gaps in employment is not a problem. However, workers who get terminated often times have difficulty finding work and may take them months on their job search. Mortgage lenders require two years of employment history for a mortgage loan borrower to be able to qualify for a residential mortgage loan. However, there is nothing in the mortgage lending guidelines that state that you cannot have gaps in employment in the past two years. You can have had multiple jobs and/or gaps in employment in the past two years and still qualify for a residential mortgage loan. However, many mortgage lenders may have lender overlays where they require that you need to have been in the same job in the past two years. If you are told that you do not qualify by a mortgage lender because you have had gaps in employment or multiple jobs in the past two years, find a mortgage lender that does not have such investor overlays.
Rules With Regards To Gaps In Employment
If you have been unemployed six months or less and just got a new job, then all you need is 30 days of paycheck stubs from your new job to close on your mortgage loan. As soon as you get a new full time job, you are able to apply for a mortgage loan but you cannot close on your mortgage loan until at least you have been on your new job for at least 30 days and provide 30 days of paycheck stubs. If you have been unemployed for six months or more and got a new full time job, you can qualify for a mortgage loan after you have been on your new full time job for six or more months. There are exceptions to this rule. If you have been unemployed for six or more months but got your job back from your former employer, the six month waiting period on your new full time job does not apply. If you have been a full time student and just got a new full time job, the six month waiting period on your new job does not count. Full time school is considered the same as full time employment under the eyes of the mortgage lender. Also, if you have been deployed for military duty, the six month waiting period is also exempt.
Gaps In Employment And Bad Credit
Job loss is one of the leading factors for consumers having bad credit. It is often difficult to make all of your minimum monthly credit payments on time if you have no source of income to pay it. Mortgage lenders do understand this, however, to qualify for a mortgage loan, you need to have been timely on your monthly payments for the past 12 months. Your credit scores can really plummet even with one late payments so if you have multiple creditors and are late in making your monthly minimum payments, your credit scores can easily plummet. Potential home buyers need to keep this in mind.
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