Mortgage Qualification and Job Longevity
Most folks thing that need a steady two years of job longevity in order to qualify for a mortgage loan. Most mortgage lenders do want to see a mortgage loan borrower employed for two years at the same job. However, you can still qualify for a mortgage loan even if you change jobs and have a brief period of unemployment. Job longevity shows stableness in current and future income for mortgage lenders. However, mortgage lenders do understand that temporary unemployment and job changes are inevitable sometimes.
Income Documents Required in Mortgage Qualification
One of the requirements to qualify for a mortgage loan is to show proof of two years tax returns and two years W2s. If a mortgage loan borrower has been laid off in the past two years, they may still qualify for a mortgage loan. If a mortgage loan borrower has been laid off for six months or less and starts a new job, they can still qualify for a mortgage loan right away. For example, say John Smith has been employed as an electrical engineer for ten years and he got laid off last November of 2012. He just started a job as an insurance agent March 1, 2013 and his income is the same as his prior job as an electrical engineer. Even though John Smith has changed professions and have been laid off for four months and started a new job, he can still qualify for a mortgage loan. As long as the mortgage loan underwriters feel that his current job as an insurance agent is stable and he can prove that he will be employed in the future with the same company, he will qualify for a mortgage loan.
2 year employment history
The fact that he is making the same amount of money as he did previously as an electrical engineer would be even a greater benefit. If John Smith was laid off for more than six months, there are different mortgage underwriting requirements regarding job longevity.
Gaps in employment
If John Smith had been laid off for more than six months and started his new job as an insurance agent, there is a six month job longevity requirement before he can apply for a mortgage loan. For example, if John Smith has been laid off as an electrical engineer July 1, 2012 and just started his new job as an insurance agent on March 1, 2013, John Smith would not qualify for a mortgage loan until he has been working as an insurance agent for at least six months which will be September 2013. The reason mortgage lenders want to see job longevity is because they want to make sure that the mortgage loan borrower is stable and will continue being employed in the future.
No lender overlays
If you have any questions on job longevity and mortgage qualification, please contact me at www.gustancho.com or call me at 262-716-8151 . I am a mortgage banker and correspondent mortgage lender with no lender overlays.