Requirements On Home Loan With New Job

Income and employment is probably the most important factor when it comes to qualifying for a mortgage loan. You can have the best credit scores and credit payment history in the world but if you do not have documented income, you will not qualify for a mortgage loan. You can have poor credit and lower credit scores but as long as you have documented income, you can qualify for a mortgage loan.  Credit scores can go up and down every month and there are tricks of the trade where you can boost your credit scores substantially by paying down your credit card balances, adding new credit with secured credit cards, or adding credit tradelines by adding yourself on as an authorized user to someone’s credit card account.  There are rules and mortgage lending guidelines when it comes to requirements on home loan with new job.

How Do Mortgage Lenders View Employment And Employment History

To be eligible for a mortgage loan, you need two year’s employment history. You can have gaps in employment and the two year employment history does not have to be continuous.  You can go from part time employment to full time employment, go from temporary worker to full time worker, go from 1099 Wage Earner to W-2 Wage Earner, go from W-2 Wage Earner to 1099 Wage Earner, or be self employed and have self employment income. Mortgage loan borrowers on social security, pension, child support, over time income, bonus income, part time income, and alimony can use these sources as income as long as these income will continue for the next three years. Mortgage loan borrowers can also have had multiple jobs in the past two years.

Mortgage lenders view longevity on employment as a compensating factor and shows strength. Job hoppers are not viewed favorably, especially those who job hop from one industry to a different industry in the past two years.  Just because you are a job hopper or had gaps in employment does not deter you from qualifying for a mortgage loan. There are rules and regulations when it comes to getting a home loan with new job.

Unemployed For Six Or More Months In Past Two Years To Qualify For Home Loan With New Job

If you have been unemployed for six or more months in the past two years, the requirements to qualify for home loan with new job is that you need to have been at your new job for at least 6 months or more. To qualify for home loan with new job, you need full time employment, either hourly and/or salaried and a verification of employment where your current employment is likely to continue for the next three years. Unfortunately, qualifying for home loan with new job, you cannot use over-time income, or bonus income unless you have been at your position for at least 2 years.

Unemployed For Six Months Or Less

If you have been unemployed for six months or less, you can qualify for home loan with new job right away but cannot close on your home purchase and/or refinance mortgage loan until you have provided 30 days of paycheck stubs from your new employer. Again, you cannot use over-time income and/or bonus income until two years of longevity with over-time income and/or bonus income. A verification of employment will be required from the new job stating that the new job will likely to continue for the next three years.

Going From W-2 Wage Earner To 1099 Wage Earner

If you were a W-2 wage earner who got a new job as a 1099 wage earner, then you need two years 1099 income to qualify for a home loan. If you were a 1099 wage earner going from 1099 wage earner to W-2 wage earner status, then all you need is 30 days of paycheck stubs from your new employer who is paying you W-2 wages with a verification of employment stating that your employment is likely to continue for the next three years.

Part Time And Overtime Income For Home Loan With New Job

Part time income and overtime income as well as bonus income cannot be used unless it has been seasoned for at least two years. Any part time income, overtime income, and bonus income that has not been seasoned at least two years cannot be used as additional income for the mortgage loan borrower. Declining part time income, overtime income, and bonus income cannot be used to qualify as additional income.

 

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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