This BLOG On Home Loan With New Job Mortgage Guidelines And Requirements Was PUBLISHED On June 23rd, 2020
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.
Tips In Boosting Credit Scores To Qualify For A Home Loan With New Job
There are ways of boosting credit scores prior to applying for a mortgage.
This can be done by doing the following basics:
- paying down 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 a home loan with a new job.
In this article, we will discuss and cover Home Loan With New Job Mortgage Lending Guidelines And Requirements.
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
Qualifying For A Mortgage With Other Income
Borrowers on social security, pension, child support, overtime 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.
Employment Longevity With The Same Employer Shows Strength And Stability
Lenders view longevity on employment as a compensating factor and show 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 a 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 a home loan with a new job is six months seasoning on a new job.
- To qualify for a home loan with a new job, need full-time employment, either hourly and/or salaried and verification of employment of the current employer
- Employment is likely to continue for the next three years is required
Unfortunately, qualifying for a 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
- 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 a 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 is 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.
June 23, 2020 - 4 min read