Mortgage After Unemployment With Employment Gaps

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this article, we will discuss and cover qualifying for a home mortgage after unemployment with employment gaps. Homebuyers do not need a two-year employment history with the same company. Borrowers can qualify for a home mortgage after unemployment with employment gaps. Many mortgage loan applicants assume they automatically need two years of continuous employment history in order to qualify for a mortgage loan. This is not true. Homebuyers can qualify for a mortgage after unemployment in the past two years. Borrowers can qualify for government and conventional loans with multiple gaps in employment. In the following sections of this blog, we will cover and discuss mortgage after unemployment with employment gaps.

Can You Get a Mortgage With Multiple Job Gaps in the Past 2 Years?

You can have one or more gaps in employment in the past 24 months and qualify for a home mortgage. Per agency mortgage guidelines of FHA, VA, USDA, Fannie Mae, and Freddie Mac, borrowers can qualify for an owner-occupant primary home loan with gaps in employment in the past 24 months. However, many lenders may have tougher guidelines when it comes to gaps in employment in the past two years. You can work for multiple part-time jobs and get a new full-time job in the past two-years and qualify for a mortgage. You can go from a 1099 wage earner to a full time W-2 wage earner and qualify for a mortgage.

Do All Mortgage Lenders Have The Same Requirements for Mortgage After Unemployment?

Not all mortgage lenders have the same requirements for a mortgage after unemployment with employment gaps. It is best to choose a mortgage lender with no overlays on a mortgage after unemployment with a gap in employment. All mortgage lenders need to follow the minimum agency mortgage guidelines of the loan program.

Lenders can have higher lending guidelines that are above and beyond the minimum agency mortgage guidelines called lender overlays. Therefore, some lenders may tell you that you do not qualify for a mortgage if you have not been employed with the same employer for the past two years. This employer has its own lender overlays on employment gaps.

How To Qualify For a Mortgage With Bad Credit?

Not all mortgage lenders have the same mortgage requirements on government and conventional loans. Many lenders may require a two-year employment history with no gaps in employment. All mortgage lenders can have higher lending requirements above and beyond the minimum agency mortgage guidelines.

Gustan Cho Associates are mortgage brokers with no lender overlays on employment gaps. We just follow only the minimum agency mortgage guidelines and have no other lender overlays. Therefore, agency guidelines state you can have gaps in employment in the past 24 months and still qualify for a home mortgage. Gustan Cho Associates honors the employment guidelines.

Do Mortgage Companies Require You To Have The Same Job For Two Years?

Remember that all lenders need to meet the minimum agency mortgage guidelines of FHA, VA, USDA, FANNIE MAE, and FREDDIE MAC. However, lenders can have higher lending standards of their own called lender overlays. Therefore, not all lenders have the same lending requirements for government and/or conventional loans.

This is where many borrowers may get conflicting answers to questions asked. Agency guidelines allow employment gaps in the past two years. You can qualify for a mortgage with multiple jobs in the past two years if you follow the agency guidelines. However, it is up to the individual mortgage lender if they will be honoring the agency guidelines or if they will impose tougher guidelines.

How Long Is Too Long Of An Employment Gap?

Borrowers can qualify for a mortgage with employment gaps in the past two years. As long as the employment gap is six months or less, you can qualify for a mortgage with gaps in employment. Preferably, lenders want you to have the job in the same field or a field you have the expertise and/or training in. Borrowers should study the basic agency mortgage guidelines before shopping for a mortgage.

This way, they will know if they meet the minimum agency guidelines of the loan program they are applying for. If they are told they do not qualify, borrowers will know whether they do not meet the minimum agency guidelines or they do not qualify with the individual lender due to their overlays. Gustan Cho Associates has no lender overlays on government and/or conventional loans.

Why Do So Many Mortgage Lenders Have Overlays On Gaps In Employment?
Lender Overlays On Gaps In Employment

Many lenders have lender overlays on gaps in employment and will require borrowers to be employed with the same company for the past two years. Although FHA, VA, USDA, FANNIE MAE, and FREDDIE MAC allow borrowers to have had multiple jobs and/or employment gaps in the past two years, many lenders think if a borrower did not have the same job in the past two years that they do not have employment stability and poses risk for the lender. Therefore, even though agency guidelines state otherwise, many lenders have lender overlays on employment gaps and multiple jobs in the past 24 months.

Can I Qualify For a Mortgage Without Two Years’ Work History?

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 the 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.

Can I Qualify For a Mortgage With a Job Gap of Over Six Months?

There is no waiting period for your new job if you have a job gap of less than six months. However, if you have a job gap of six months or longer, you need to be in your new job for at least six months. There are no waiting period requirements on your new job with a job gap long than six months if you go back to the same job you left.

How Long Do You Have To Be at a Job To Get a Mortgage?

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.

What Do Mortgage Lenders Consider A Job Gap?

There are rules and regulations with regard 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 current full-time job will be used for income qualification purposes.

How Mortgage Lenders Verify New Job For Borrowers With Employment Gaps?

Lenders want to see the continuity of employment. Lenders also want to see the likelihood of future employment so they do not have trouble paying 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.

Mortgage With New Full-Time Job After Working For Temp Agency

I have originated many mortgage loan applications where borrowers had multiple temporary jobs, gaps in employment, part-time jobs, and 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 jobs. The employer who used the temp worker was so impressed with their work that they hired them full time where they no longer work 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.

Do Mortgage Companies Require You Have the Same Job For the Past Two Years?

Borrowers do not have to be employed in 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 means 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 After Starting a New Job Should I Apply For a Mortgage?
Alternative FinaNew Job To Qualify For Mortgage After Unemploymenncing Lender

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 a new job and the employer verifies that the 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 the 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 A Mortgage With Job Gaps After Being Denied

Gustan Cho Associates is one of the very few national lenders with no lender overlays on government and conventional loans. Over 75% of our borrowers at Gustan Cho Associates are folks who met the minimum agency mortgage guidelines but could not qualify for a mortgage due to the individual lender overlays. At Gustan Cho Associates, we just go off the automated findings of the automated underwriting system (AUS). Home Buyers who are having a hard time qualifying for a mortgage after unemployment and employment gaps needing to qualify with a national mortgage company licensed in multiple states with no overlays on government and/or conventional loans can contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected] Gustan Cho Associates has zero overlays on FHA, VA, USDA, and Conventional Loans. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays.

Related> Gaps in employment and Mortgage

Related> Gaps in employment