How to Get a Mortgage With Short Employment History or Employment Gaps

How to get a home loan with a short employment history or gaps in your employment history.

This article is about getting a mortgage with employment gaps or a short employment history.

Most mortgage programs require applicants to provide a two-year employment history. That means supplying a pay stub showing your year-to-date income as well as W-2 forms covering two years of employment. 

A two-year employment history does not necessarily mean two consecutive years at the same job. You can have gaps in employment and/or multiple jobs in the most recent two years and still qualify for mortgage approval.

If there are gaps in your most recent two years of employment, you’ll need to disclose your prior job history.  Suppose that you’ve had your current job for a year. And that before that, you were out of the workforce for a year. And before that, you had a different job. You’ll need to go back three years to come up with a two-year job history on your mortgage application. 

In some cases, you can have as little as 12 months of employment history and still qualify for a home loan. Suppose that you graduated from college and began your career a year ago. Some programs will count your last year of college as work experience.

Get a mortgage quote now

Can I Get a Mortgage With Gaps in Employment?

Applicants with gaps in their employment can qualify for a mortgage. It’s not uncommon for people to exit the workforce to go back to school, have a child or deal with medical issues. 

These things don’t have to prevent mortgage approval as long as you can show three things: that your income is sufficient to qualify for a mortgage, that it’s reliable, and that it’s ongoing. If you can demonstrate those things, you can get approved for a mortgage with employment gaps. 

Related: How to Write a Letter of Explanation for Employment Gaps

Gaps In Employment

There are rules and regulations when it comes to gaps in employment.

  • If your employment gap is six months or less, you’re eligible for most mortgage programs if you have a full-time job and can provide pay stubs covering 30 days of wages. 
  • If you have been unemployed for six or more months, then you’ll have to work for at least six months at your new job before most lenders will consider you for a home loan. 

It’s a good idea to prepare an explanation for long or multiple employment gaps. If you lost a job through no fault of your own or left the workforce as part of a plan, informing your lender can only help your cause. 

Can I Get a Mortgage With Part-Time or Second Job Income?

In order to use part-time income or second full-time job income, you normally need to work your part-time job and/or second full-time job for at least two years. You’ll provide pay stubs with year-to-date information as well as two years of W-2 forms. 

Lenders normally average income from part-time, seasonal, or hourly work as long as it’s stable or increasing. If your income has declined, lenders will want to make sure that your earnings are stable. and your job is safe. How healthy is your company? Your industry? Your position? If you earned less because you chose to work less, explain this. If you have good information about your company’s earnings, your performance reviews, or anything that will convince a lender that your job is safe, make sure your lender gets it. 

Will Lenders Count My Higher Income After a New Promotion?

If you are paid hourly and your hours vary from week to week, lenders average your income over the last two years. But if your hours per week do not vary, your lender calculates your income based on your higher hourly rate.

If you are promoted from hourly to a full-time salaried position, lenders do not average your income. They use the new salary. 

This holds true as long as the full-time status can be verified through an employment offer letter and/or verification of employment.

Can I Get a Mortgage With Multiple Job Changes?

If you’re a job-hopper, lenders will look closely at your employment history to make sure that your income is stable and ongoing. Multiple job changes are not necessarily bad. However, the nature of the jobs you choose can help you or hurt you when applying for a mortgage. 

Bob has had four jobs in the last two years. He worked as a personal trainer for six months, then in a coffee shop for nine months, then drove a cab for three months, and has worked in his current job in a retail store for five months. His income has declined slightly and he has a one-month employment gap. This could hurt him if there are any other weaknesses in his file, such as a low-ish credit score.

Beth has also changed jobs several times. She started as a restaurant server and then moved into the business office as a bookkeeper. She was promoted to accountant after a year and then changed companies to take a similar position with a higher salary. Job changes are viewed as positive if they come with increasing responsibility and/or pay. 

Can I Get a Mortgage With a New Job?

You can get a mortgage with a new job if you did not have a gap exceeding six months. You just need to receive your first paycheck within 30 days of closing your loan. You’ll submit your offer letter from your employer when applying for a mortgage. It should specify your job title, start date and pay. The lender will probably also verify your new job directly with your employer. 

Related: Job Relocation Guidelines

Can I get a Mortgage With a Short Employment History?

Most mortgage programs require at least 2 years of employment history. However, you may be able to qualify for a mortgage with a shorter history if you have “compensating factors” that make you a more attractive borrower. 

Supposing that you’re a recent college graduate and you’ve been at your first job for a few months. If you are working in the field for which you trained, your education will usually count as work experience. New grads usually have little trouble with mortgage eligibility even in new jobs.

If you have a recent job change and you’re in a different field, write a letter explaining how the two jobs are similar and how the change enhanced your career prospects. For instance, if you worked as a journalist and switched to advertising, 

Keep in mind that the above only applies to salaried, full-time work. You’ll likely need at least two years of reliable income if you mainly earn bonuses, overtime, commission, or self-employment income. And if you take on a second, part-time job for extra earning, you’ll need a two-year history for lenders to consider it.

Declining Income In Qualifying Mortgage With Short Employment History

Mortgage Qualification Questions? Leave it to Us

Homebuyers who need to qualify for a mortgage with a national mortgage company licensed in multiple states with no mortgage overlays on government and conventional loans, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates are also experts in non-QM and alternative financing mortgage programs such as bank statement mortgages, asset-depletion loans, non-QM mortgages one day out of bankruptcy and foreclosure, and dozens of other non-QM loan programs. Gustan Cho Associates has a national reputation for being a one-stop mortgage shop. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.

26 Comments
  1. Dale says

    Wow. This is not what I was told. I was told that I would need to be on a job for at least two years straight to be able to get approved for a loan. I am only 9 weeks short from being on my current job. I am trying to get one of my employers from years ago to verify me being on my job for two years, because with the jobs in-between the one I have now and the one I am contacting I was almost with that one for two years but it closed and we were laid off and the other I had to stop working due to hardship and I had to stay home with my youngest daughter who was a baby at that time. I have over 10+ years of work history. I am so frustrated and nervous right now because I am being told that I will need two years from a single employer. I have had a hard time trying to pull my W2’s from that long ago from the IRS because I can’t create an account. I have called employers and a lot are out of business. I am really struggling with this information and the loan will fail if I don’t provide it soon.

    1. Gustan Cho, NMLS 873293 says

      You were told wrong. You can have gaps in employment in the past two years and have multiple jobs for the past two years. Your income is calculated with your current job and verification of employment from your current employer. Email us your contact information so you can get approved with us at gcho@gustancho.com. Or call us at 262-716-8151 or text us for a faster response. We are looking forward to working with you and your family.

  2. Dale says

    Thank you for your quick response. My concern is that my gap is more than two years, it’s five years. We had a hardship at the time and I had to stay at home with my daughter who was a baby at the time. Would this still pertain to me? What do I need to produce to get them to approve the loan? It is in its final stages. If it does not work out I will definitely be contacting you. My husband and I together are about $7000 in monthly income. My VOE is the only thing holding us up for approval. I’ve been waiting for the company to send it back. I am so nervous.

    1. Gustan Cho, NMLS 873293 says

      You can have a gap in employment for over ten years. It does not need to be within a two year period. You are going to be fine. If your current lender gives you a hard time, you can transfer your file to me and my team and we will have it done for you without any stress. Feel free to reach out to me and/or my team at gcho@gustancho.com. Or call us at 262-716-8151 or text us for a faster response.

  3. Dale says

    I’ve been responding but it doesn’t seem like my response is being posted

  4. Jamie says

    Wow, I feel better reading this! I was told just the opposition by a “big” national lender. I have worked at a professional career for many years but had to leave my job for 5 years for a medical situation. I sought treatment, received supplemental income during that time which was much lower, and am now recovered and have been back at my career for the past year, doing better than ever! I’m making good money, climbing the ladder, paid off my current home and am ready to purchase a new one. But, two lenders that I have checked with said that they won’t back me because of my gap in employment, that no one would, that I have to have 2 consecutive years of employment. Trust me, if I could have avoided being ill and kept working, I would have! I feel like I’m being punished for something that was beyond my control. Perhaps you should give the “big” lenders some lessons.

    1. Gustan Cho, NMLS 873293 says

      You are not going to have any issues with employment gaps. NO PROBLEM. You can have employment gaps in the past two years. We just go off the most current job offer salary from your most recent job and don’t care about the prior incomes and/or income tax returns. Feel free to reach out to us at gcho@gustancho.com or call us at 262-716-8151 or text us for a faster response. Looking forward to working with you and your family.

  5. able charlie says

    Need a % down mortgage for a non conventional property in Elfrida, Arizona . Property has a main house w/ a small building that cod be used as office or small resident on 2 parcels for 82 Ac.

  6. Alex Carlucci says

    We need to make sure you’re aware of how important these next few days will be. Massimo Ressa, the CEO of Loan Cabin, Inc. and the support staff and team at Loan Cabin support President Donald J. Trump. The goofy senile old Joe Biden and his whore dirty knees Kamala Harris and the Democrats has cheated big time. There is no way Joe Biden and Kamala Harris will step in the White House. Joe Biden wears a diaper due to his old age and should be checked in to a hospice due to his dementia and alzheimer. Kamala Harris should take a job as a hooker at the Mustang Ranch in Nevada. Joe Biden, Kamala Harris, and the FAKE NEWS media are all working together to convince the American People that President Trump has NO SHOT of winning this Election.

    Remember, if we let the Radical Left win…

    They will RAISE your taxes.
    They will cut critical police funding.
    They will KILL vital American energy jobs.
    They will open our borders to illegal immigrants.
    And, they will appease SOCIALIST dictators.

    FIGHT BACK >>

    The stakes have NEVER been higher! YOU are the only thing that can stop them, which is why we need your help to send a STRONG message to the Left that America wants a FAIR and TRANSPARENT Election.
    Let’s get 1,000,000 signatures from Americans standing with their President and Vice President against the Radical Left.
    Please add your name NOW to stand with President Trump and Vice President Pence to DEMAND a FAIR Election.
    STAND WITH PRESIDENT DONALD J. TRUMP and TEAM
    President Trump and Vice President Pence are really counting on your support right now.
    We’re sending them a list of EVERY Patriot who steps up today. Make sure they see your name.
    Please add your name IMMEDIATELY to publicly stand with President Trump and Vice President Pence. >>

    Thank you,

    Team Trump 2020

  7. Brett Lee says

    Looking to buy a duplex. My plan is to live in one side and rent out the other. Most places want atleast 20k down.

  8. Charles Bannon says

    Good Morning;

    Currently, I’m in a Chapter 13 and want to buy a home with a VA Loan. I saw a video and you explain that if I have money in savings account that possibility exist that the trustee will required for me to surrender such savings. The Chapter 13 is for 5 years, Jan 2017 to Jan 2022, don’t have any debt or delay payments in my chap13 what you recommend. Currently I’m in the process of preapproval but if my savings are compromised I rather wait until is discharge!

  9. dales styen says

    I read a lot of posts but the topic covered in this is the most comprehensive and found this blog very helpful. This is the ever best post I have search. The data and the purpose of this post is totally amazing and so much informative. I am satisfied and learned a lot from Gustan Cho Associates and about non-QM loans and other mortgage services. Thanks a lot for sharing it with us. I would definitely recommend Gustan Cho Associates to others. Thank you for sharing this valuable information with us. This is the ever best post I have search on the internet. I like to thank Jammi Cash, Michelle McCue, Alex Carlucci, Dale Elenteny of Gustan Cho Associates. I also like to thank Mike Richardson and Tammy Trainor of Capital Lending Network, Inc. for working so hard in getting me pre-approved and qualified with a non-QM mortgage one day out of bankruptcy. We are very happy that we closed on the loan just yesterday.

  10. Alberto Lopez says

    I went from 6 years active duty to commission base income as a real estate agent. Is there a loop hole to qualifying since as of dec 2020 i have 18 months as a realtor?

    1. Gustan Cho, NMLS 873293 says

      If you are a commission wage earner, then you need two years seasoning and tax returns to qualify for any loan program.

  11. Kumar K says

    Thanks for a nice post. I am in a continuous job for the past 14 years but was transferred to the International branch for 2 years. During those 2 years, I don’t have US w2 as the salaries were paid in local currency. I am with the same company for the past 11 years. will I have issues in getting the mortgage considering I DONT HAVE LAST 2 CONSECUTIVE W2s?

    1. Gustan Cho, NMLS 873293 says

      Did you file U.S. income tax returns for the past two years?

  12. Maria says

    Hi Gustan, We are looking to refinance about 350k on a house that is valued at $550k. My husband makes about $45k but I’ve stopped working since 2015 but I have a job offer to start this April. We own 2 multi use properties that have been paid off worth maybe 1.5 million and about $ 300k in retirement savings. I have about 28 years of continuous employment history and I can prove it through my social security statement. what are our chances of getting refinancing? Should I wait until April when I have a job?

    1. Gustan Cho, NMLS 873293 says

      Maria, can you please reach out to us at gcho@gustancho.com or call at 262-716-8151 or text us for a faster response. Depends on the income and debt to income ratio. Looking forward to working with you and your family.

  13. Marisela Faviat says

    TO: ALEX CARLUCCI

    THIS ISNT A POLITICAL FORUM. YOUR COMMENT IS SICKENING AND OUT OF LINE. BIDEN WILL BE THE NEXT PRESIDENT OF THE U.S. STOP POURING AND SPREADING SO MUCH HATE AND VENUM.

  14. Alex Carlucci says

    Marisela, I agree with you. This is not a political forum and I am neither a Democrat nor Republican. I am apolitical and just report on facts and not fiction. Joe Biden has accomplished absolutely nothing during his 50 year tenure in politics. He has gotten rich from taxpayer dollars. He is in the final stages of dementia and alzheimer and should be in a hospice rather than the White House. In your opinion, what has Biden accomplished in the past 50 years in politics? Absolutely nothing. ZERO, NADA, ZILPO. With all due respect, I just report on facts and the facts say that Biden is incompetent to lead our country.

  15. Tamara Sanford says

    I’m under contract with a new build, I’ve been working 2 jobs for 3 years all the way until September when I was Approved by the builder lender and signed the contract. I still have my full time job as a nurse where I been working for the past 4 years but my hours was cut on my part time. I would like you guys to look at my profile and see if you can help

  16. Kevin Brooks says

    Do you originate loans in Colorado?

    1. Gustan Cho, NMLS 873293 says

      Yes, we are licensed in Colorado

    2. Gustan Cho, NMLS 873293 says

      We are licensed in Colorado.

  17. Bonnie Sullivan says

    My 20 yr old son wants to buy he was in college in 2018 and part of 2019 worked part time at a restaurant for around 3 months while in school when he left school he got a full time warehouse job that lasted about 4 months then relocated out of state and now has been employed with same company 1 year as of this January, would he qualify ?

    1. Gustan Cho, NMLS 873293 says

      We can help your son. He needs to be in his full-time job for six months as a full-time employee. Please reach out to us at gcho@gustancho.com. Or call us at 262-716-8151 or text us for a faster response.

Leave A Reply

Your email address will not be published.

Call Now ButtonCALL NOW