Home Loan With New Job Mortgage Lending Guidelines And Requirements

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Home Loan With New Job Mortgage Lending Guidelines And Requirements

This BLOG On Home Loan With New Job Mortgage Lending Guidelines And Requirements Was Written By Massimo Ressa of Gustan Cho Associates

This BLOG On Home Loan With New Job Mortgage Lending Guidelines Was UPDATED On July 31st, 2018 and Written By Massimo Ressa

Income and employment is probably the most important factor when it comes to qualifying for a mortgage loan.

  • Borrowers can have the best credit scores and payment history in the world but if they do not have documented income, they will not qualify for a mortgage loan
  • Borrowers can have poor credit and lower credit scores but as long as they have documented income, they can qualify for a mortgage loan
  • Credit scores can go up and down every month
  • There are tricks of the trade where consumers can boost their credit scores substantially
  • This can be done by doing the following basics:

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, borrowers need two year’s employment history.

  • Borrowers can have gaps in employment
  • The two year employment history does not have to be continuous
  • Borrowers can qualify with the following:
    • go from part time employment to full time employment
    • temporary worker to full time worker
    • 1099 Wage Earner to W-2 Wage Earner
    • W-2 Wage Earner to 1099 Wage Earner
    • Or be self employed and have self employment income
  • Borrowers on social security, pension, child support, over time income, bonus income, part time income, and alimony can use these sources as income with two years seasoning
  • Mortgage Underwriters needs to feel confident that borrowers will continue receiving these other types of income for the next three years
  • Borrowers can also have had multiple jobs in the past two years

Lenders view longevity on employment as a compensating factor and shows strength.

  • Job hoppers are not viewed favorably
  • This is especially those who job hop from one industry to a different industry in the past two years
  • Just because borrowers are a job hopper or had gaps in employment does not deter them 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 For Home Loan With New Job

Borrowers who have been unemployed for six or more months in the past two years, the requirements to qualify for home loan with new job is six months seasoning on new job.

  • To qualify for home loan with new job, need full time employment, either hourly and/or salaried and a verification of employment of current employer
  • Employment is likely to continue for the next three years is required
  • Unfortunately, qualifying for home loan with new job, borrowers cannot use over-time income, or bonus income unless they have been at the position for at least 2 years

Unemployed For Six Months Or Less

Borrowers unemployed for six months or less can qualify for home loan with new job right away but cannot close on their home purchase and/or refinance mortgage loan until they have provided 30 days of paycheck stubs from their new employer.

  • Again, 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
  • VOE needs to states new job will likely to continue for the next three years

Going From W-2 Wage Earner To 1099 Wage Earner

W-2 wage earners who got a new job as a 1099 wage earner, they need two years 1099 income to qualify for a home loan.

  • 1099 wage earners going from 1099 wage earner to W-2 wage earner status, they need is 30 days of paycheck stubs from new employer
  • 30 days of paycheck stubs proving W-2 wages with a verification of employment stating employment is likely to continue for the next three years.

Gustan Cho Associates offers W2 Income Only Mortgages where no income tax are required. W2 Income Wage Earners with substantial unreimbursed business expenses on their income tax returns do not have to provide income tax returns. No schedule C and/or schedule E expenses can be filed to qualify for W2 Income Only Mortgages.

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.

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