This BLOG On Mortgage After Unemployment And Employment Gaps Was UPDATED And PUBLISHED On August 1st, 2019
Many mortgage loan applicants assume they automatically need two years of continuous employment history in order to qualify for a mortgage loan.
- Many just assume that one of the questions asked on a mortgage loan application is the two-year employment history
- To top this off, many mortgage loan applicants go on the internet and read mortgage blogs from writers who are not in the mortgage business and get wrong information
- Many ghost blog writers write blogs that a mortgage applicant needs two years of continuous employment history or they will not qualify
- Bottom line is that borrowers can qualify for a mortgage after unemployment
- Borrowers do not need two years of continuous employment history
- Gaps in employment in the past two years will not disqualify borrowers for a mortgage
- Many mortgage lenders do have mortgage lender overlays and do prefer borrowers has had two years continuous employment with the same employer
- This is because stability in employment shows financial stability to the mortgage lender and the likelihood of continuous employment of borrowers
In this article, we will cover and discuss Mortgage After Unemployment And Employment Gaps.
Mortgage After Unemployment With Employment Gaps
Here are the rules and regulations with regards to employment history and employment gaps when qualifying for a mortgage loan.
- Mortgage lending guidelines do require a two-year employment history
- But the employment history does not have to be continuous with the same job
- Borrowers can have multiple jobs in the past two years with different pay levels
- But the only most current full-time job will be used for income qualification purposes
- Lenders want to see the continuity of employment
- Lenders also want to see the likelihood for future employment so they do not have trouble paying for their mortgage payments timely
- Verification of employment will be required from the current full-time employer
- One of the questions lenders ask is if the likelihood of continuous employment is likely
Temporary Jobs To Full Time Jobs
I have originated many mortgage loan applications where borrowers had multiple temporary jobs, gaps in employment, part-time jobs, working for a temp agency:
- All of a sudden temp employee lands a solid full-time job with an employer
- There are cases where I had borrowers who worked for a temp agency and the temp agency placed them in full-time permanent job
- The employer who used the temp worker was so impressed with their work that they hired them full time where they no longer works for a temp agency
- There are folks who lost their jobs or business due to the Great Recession of 2008 and have been unemployed for many years and finally got a full-time solid job
- These folks will qualify for a mortgage even though they were unemployed for many years
2 Year Employment History And Gaps In Employment
Borrowers do not have to be employed with the same job for the past two years. Borrowers can have multiple jobs in the past two years. Two-year employment history is required and gaps in employment are allowed in qualifying for a mortgage.
- The 2-year employment history mean employment history and not continuous employment history
- For example, here is a case scenario:
- if Borrower A has a full-time job working for Company A
- and has been working at Company A for six months
- but was unemployed for 3 years
- Borrower A needs to provide one and one-half year of prior employment history prior to his unemployment period
How Long Do You Have To Be On New Job To Qualify For Mortgage After Unemployment?
There are current job longevity requirements when it comes to qualifying for a mortgage after unemployment.
- Home Buyers unemployed for six months or less and have a new job, then there is no longevity or seasoning requirement to be on a new job to qualify for a mortgage
- 30 days of paycheck stubs prior to issuance of clear to close and is required to close on the loan
- Borrowers will qualify the minute they get new job and employer verifies that borrower is employed full time and employment is likely to continue for the next three years
- However, if the home buyer has been unemployed for six or more months, then borrower needs to be on a new full-time job for at least six months in order to qualify for a mortgage after unemployment
Qualifying For Mortgage With Lender With No Overlays
Home Buyers who are having a hard time qualifying for a mortgage after unemployment and employment gaps needing to qualify with mortgage lender with no overlays can contact us at The Gustan Cho Team at Loan Cabin at 262-716-8151 or text us for faster response. Or email us at email@example.com. Gustan Cho Associates has zero overlays on FHA, VA, USDA, and Conventional Loans. We are available 7 days a week, evenings, weekends, and holidays.