In this blog, we will discuss and cover qualifying for home loan with job offer letter. One of the frequently asked questions at Gustan Cho Associates is can I qualify for home loan with job offer letter? There are certain rules and regulations in qualifying for a home loan with job offer letter. Every mortgage company has its own lender overlays when it comes to guidelines on a home loan with job offer letter.
Mortgage lenders with no overlays, such as myself, can start processing a mortgage loan application with a job offer letter and close without 30-day paycheck stubs. Most lenders require at least one month’s worth of paycheck stubs as well as written verification of employment by the employer who offered the job offer letter
Can I Get a Home Loan With Job Offer Letter?
Both HUD, VA, USDA, Fannie Mae, and Freddie Mac have mandatory employment history requirements for borrowers. Two-year employment history is required in order to qualify for a mortgage loan. Most lenders require two years of employment history with the same company. However, these are not agency guidelines by FHA, VA, USDA, Fannie Mae, or Freddie Mac. Borrowers can have multiple jobs in the past two years with gaps in employment and qualify for a mortgage. Borrowers can also have an extended gap in employment and still qualify for a mortgage
Can I Get A Mortgage With Gaps in Employment?
As mentioned in the previous paragraph, mortgage loan borrowers can qualify for a mortgage loan with gaps in employment. If you have had a six-month or less gap in employment, you can qualify for a mortgage loan if you got a new full-time job but need at least 30 days of paycheck stubs in order to close on your home loan. If you have been unemployed or out of work for six or more months, then you need to have a six-month seasoning with the current new full-time employer in order to qualify for a mortgage loan
Can I Buy A Home Going From Part-Time To Full-Time Employment?
If you have a job that you have been working part-time for many years and got full-time status or have gotten a promotion, a new full-time income will be used. Part-time and full-time income over the past two years will not be averaged. Part-time jobs are considered as part of employment history and will qualify for the 2-year employment history requirement
Can I Get a Mortgage Without a Two-Year Employment History?
To qualify for a mortgage loan, agency guidelines require borrowers need a two-year employment history. The two-year employment history does not necessarily have to be a continuous employment history. Gaps in employment are allowed. The exception to this rule is if the borrower has been enrolled full-time at either a technical school and/or college or university.
Trade school transcripts and college and/or university transcripts can be used in lieu of the mandatory 2-year employment history requirements. Recent high school graduates with full-time jobs can qualify for a mortgage even though they did not have 2-year work experience. The full-time period they were full-time high students can be used in lieu of work history.
Home Loan With Job Offer Letter For Recent College Graduates
Many college students who will be graduating from college often get Job Offer Letters where once they graduate, they can start work. College students with a job offer letter can qualify for a mortgage loan with a job offer letter. Again, most lenders do not allow them to close on their home loan until they have 30 days of paycheck stubs from their new employer.
Gustan Cho Associates Mortgage Group can make exceptions and we can close on the new home purchase without the home buyer starting a new job. They do not need a two-year work history because the time being a full-time college student will qualify them in lieu of being in the workforce.
FHA Loans on Home Loan With Job Offer Letter
Most lenders will require home buyers to start their job and require them to provide 30 days’ paycheck stubs before they can close on their home loan with a job offer letter. This is not an agency guideline but rather mortgage lender overlays. Overlays are additional mortgage guidelines above and beyond agency mortgage guidelines. HUD, the parent of FHA, requires income verification within 60 days of post-closing in order for HUD Endorsement. However, most lenders will require borrowers to have 30 days of paycheck stubs prior to issuing a clear to close.
Conventional and VA Loans on Home Loan With Job Offer Letter
Conventional and VA Loans are different. Most lenders will allow closing with an employment offer letter without 30 days of paycheck stubs. Agency guidelines do not allow for any contingent terms with job offer letters. For example, a medical doctor is hired contingent upon him passing his board examination. Or a law student got a job offer letter in his senior year but it is contingent upon passing the BAR and being able to get licensed.
Gustan Cho Associates Mortgage Group will accept a written verification of employment along with the employment offer letter by the employer. Reserves will be required with a home loan with job offer letter to make sure borrowers are able to cover their mortgage payments until they start their job.
July 12, 2022 - 4 min read