How to Get a Mortgage With Short Employment History

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Mortgage With Short Employment History: Your Guide to Getting Approved

If you think having a short employment history will stop you from getting a mortgage, think again. Many prospective homebuyers might be astonished to discover they are still eligible for a home loan, even if they do not possess a conventional two-year employment record.

Whether you’re a recent graduate, someone re-entering the workforce, or starting a new job, there are ways to show lenders you’re a reliable borrower. At Gustan Cho Associates, we specialize in helping borrowers navigate challenges like these and secure the financing they need.

In this guide, we’ll explain the options, requirements, and strategies for getting a mortgage with short employment history so you can take the next steps toward homeownership.

Do You Need Two Years of Employment History for a Mortgage?

When applying for a mortgage with short employment history, remember that most lenders want to see a two-year work history. However, this doesn’t mean you must stay at the same job for two years. Lenders are more interested in your work patterns overall, not just your last two years.

So, if you’ve switched jobs, had some time off, or just recently started a new position, you can still qualify for a mortgage. Don’t worry too much about your job changes; it’s all about your entire work journey!

Here’s what lenders typically want to see:

• Consistent income: Lenders care more about income stability than the number of jobs you’ve had.
• Ability to repay: Lenders want to know that your income is reliable and ongoing.
• Gaps explained: If you’ve had employment gaps, be prepared to explain them with a letter of explanation.

At Gustan Cho Associates, we help people who may not fit the usual lending rules. We know that life can throw surprises your way, and our team is here to help you. If you’re looking for a mortgage with short employment history, don’t worry—we’re dedicated to finding solutions that work for you.

Exceptions to the Two-Year Rule

If you don’t meet the standard two-year employment requirement, don’t worry. Many borrowers qualify under exceptions or alternative guidelines. Let’s look at some common situations:

1. Recent Graduates

If you recently graduated and started your career, lenders may count your time in school as part of your work history. For example:

• If you completed a four-year degree and have been working in your field for six months, your education can act as your two-year history.
• You must provide transcripts and proof of employment, such as pay stubs and an offer letter.

2. Re-entering the Workforce

If you’ve been out of the workforce to raise a family, go back to school, or address medical issues, you can still qualify. Here’s what you’ll need:

• A steady job for at least 30 days.
• Documentation explaining the gap (a letter of explanation).
• Evidence that your current income is sufficient, reliable, and ongoing.

3. Job Changes

Frequent job changes don’t necessarily disqualify you. If you’ve switched jobs a lot, it might not be a big deal to get a mortgage with short employment history. Lenders often look at how steady your income has been. If you’ve been making the same amount or even earning more, that’s a plus. If you’ve moved up in your career or found a better-paying job, that can also help your chances.

Understanding Employment Gaps

Life happens, and employment gaps are more common than you might think. Whether you took time off to care for a loved one, recover from an illness, or pivot your career, lenders are open to reviewing your unique situation. Here are some key points to remember:

Short Employment Gaps (Less Than Six Months)

• You’ll generally qualify if you’ve been back at work for at least 30 days.
• Provide pay stubs and a letter explaining the gap.

Long Employment Gaps (More Than Six Months)

• Before approving a mortgage, lenders typically want to see six months of steady income at your new job.
• Include as much documentation as possible, such as proof of savings or reasons for the gap.

At Gustan Cho Associates, we’ve helped many people like you who have gaps in their work history get the homes they want. Our team knows how to highlight your situation to lenders, so they see the best side of your story. If you’re looking to get a mortgage with short employment history, we’re here to help you through the process!

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

Can You Get a Mortgage With a New Job?

Starting a new job can be really exciting, and it doesn’t mean you have to put your dream of owning a home on hold. Many lenders are open to giving you a mortgage with short employment history if you meet a few simple conditions. If you’re starting fresh at work but still want to buy a house, don’t worry—options are available, especially if you meet these conditions:

• You just need to receive your first paycheck within 30 days of closing your loan.
• Your offer letter confirms your salary, job title, and start date.
• Your job is full-time, stable, and likely to continue for at least three years.

For those moving into a salaried role from an hourly or commission-based job, lenders may use your new salary to calculate your income. This can be a significant advantage if your new position offers higher pay or better benefits. This holds true as long as the full-time status can be verified through an employment offer letter and/or verification of employment.

Related: Job Relocation Guidelines

Using Part-Time or Multiple Jobs to Qualify

If you have a part-time job or several jobs, lenders might look at that income when you apply for a loan. However, there are some rules to keep in mind. If you’re trying to get a mortgage with short employment history, it’s important to show that your income is steady and reliable. Lenders want to make sure you can handle your payments, even if your job situation isn’t traditional. Keep your pay stubs and any records that show your earnings to help your case.

1. Part-Time Jobs
   • You must have worked a part-time job for at least two years.
   • When you apply for a mortgage with short employment history, lenders usually look at your income from the last two years to figure out how much you can borrow. They average what you’ve made during that time to see if you qualify.
2. Multiple Jobs
   • Income from multiple jobs can be combined, but you need a two-year history for each job.
   • Stability is key: Lenders will check that your total income is consistent or increasing.

What About Declining Income?

If your income has decreased over time, lenders may view you as a higher risk. However, this doesn’t mean you’re out of options. Here’s what you can do:

• Provide a letter explaining the reason for the decline.
• Show evidence that your current income is stable.
• Highlight any compensating factors, such as savings or a strong credit score.

For example, if you cut back on hours to go back to school or take care of a family member, let your lender know. Being open and honest is really important, especially when applying for a mortgage with short employment history.

Special Mortgage Programs for Short Employment History

When you’re looking for a mortgage with short employment history, some loan programs can be easier to work with. These programs understand that not everyone has a long job history and are designed to help you get approved. Let’s check out what options you have:

1. FHA Loans

When looking for a mortgage with short employment history, FHA loans can be a great option. They’re pretty flexible and can work for a lot of people. Here’s why they might be right for you:

• FHA loans only require a two-year employment history overall, not with the same employer.
• Recent graduates or those with gaps can still qualify if they meet other requirements.

Overall, if you need a mortgage with short employment history, FHA loans could be the way to go!

2. VA Loans

If you’re a veteran, VA loans offer flexible employment guidelines:

• VA lenders often focus more on residual income than job history.
• Employment gaps are usually acceptable with a strong explanation.

3. Non-QM Loans

Non-QM (non-qualified mortgage) loans are ideal for borrowers with unique situations, such as:

• Freelancers or gig workers with less than two years of income history.
• Borrowers with significant assets but short work histories.

Tips to Strengthen Your Application

If you’re applying for a mortgage with short employment history, taking these steps can improve your chances:

1. Save for a Larger Down Payment
   • A bigger down payment reduces risk for lenders, making them more likely to approve your loan.
2. Improve Your Credit Score
   • Having a good credit score is essential if you want a mortgage with short employment history. A higher credit score shows lenders that you can manage credit well, even if you haven’t been in your job for long. It shows that you’re reliable and trustworthy, which can help you secure your home loan.
3. Provide Strong Documentation
   • Gather pay stubs, offer letters, and tax returns to verify your income.
   • Prepare a letter explaining any gaps or job changes.
4. Work With the Right Lender
   • Not all lenders are created equal. At Gustan Cho Associates, we specialize in helping borrowers with non-traditional employment situations.

Real-Life Success Stories

At Gustan Cho Associates, we’ve helped thousands of borrowers with unique challenges secure their dream homes. Here are a few examples:

Success Story 1: Recent College Graduate

Sarah just graduated from college six months ago and landed her first job as a teacher. Even though she didn’t have a long work history, we helped her get a mortgage with short employment history. She brought her transcripts and job offer letter, which was enough to secure her FHA loan.

Success Story 2: Returning to Work

After a two-year break to care for her child, Maria re-entered the workforce as a nurse. With just 45 days of pay stubs, she qualified for a VA loan and moved into her new home.

Success Story 3: Freelance Consultant

James had only been freelancing for a year but had strong savings and excellent credit. We helped him purchase his first home using a non-QM loan.

Recent Immigrants and Those Who Just Got a Green Card

There are cases where people have lived in this country illegally where they just got their green card. These folks may have been employed by an employer and have gotten paid cash in lieu of W-2 or 1099 wages. Then they get a green card and continue on working for the same employer but now get paid via W-2 wages and gets taxes deducted from their employer.

The 2-year employment history time clock starts the date they have gained employment legally and their income is reported to the Internal Revenue Service. These folks cannot qualify for a residential mortgage loan until they have 2-year employment history documented.

Technically, they do have a two-year employment history. However, the work history that they have worked for their employer where no income was documented does not count. It cannot be used towards the mandatory 2-year employment history requirement due to the fact that no taxes were deducted and the fact that they were in this country illegally.

Expatriate Mortgage Loan Programs

For those illegal immigrants who just got a green card and are legal to work and those new immigrants who just got a job in this country, the Expatriate mortgage loan program is probably the only program that they will qualify for. However, lending standards and guidelines are tough.

The expatriate mortgage loan borrower needs to put in a 20% down payment. Need to provide proof that they are employed by a U.S. Company. Show proof of income from a U.S. company. The maximum debt to income ratio is capped at 43%. The expatriate mortgage loan borrower needs to show that he or she has assets and compensating factors.

A one-year reserve of principal, interest, taxes, and insurance is required besides the 20% down payment. The expatriate mortgage loan program is 30-year adjustable-rate mortgages. There are the 3/1 ARM, 5/1 ARM, and 7/1 ARM expatriate mortgage loan programs. Expats can refinance to a government and/or conventional loan after they have been legally employed in the U.S. for two years. 

Why Choose Gustan Cho Associates?

At Gustan Cho Associates, we specialize in helping you get a “yes” when others say “no.” More than 80% of our clients come to us after being turned down by other lenders. If you’ve been struggling to get a mortgage with short employment history, we’re here to help. Here’s what sets us apart:

• No lender overlays.
• Access to over 210 wholesale lenders.
• Specialized programs for borrowers with short employment histories.
• Personalized guidance every step of the way.

Ready to Take the Next Step?

Don’t let a short employment history hold you back from homeownership. At Gustan Cho Associates, we’re here to help you understand your options and secure the best loan for your situation. Call or text us at 800-900-8569 or email gcho@gustancho.com to get started on your journey to owning your dream home.

Apply now, and let us guide you every step of the way! 

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Frequently Asked Questions About Mortgage with Short Employment History: 

Q: Can I Get a Mortgage with Short Employment History?

A: Yes, you can! Many lenders, including Gustan Cho Associates, work with borrowers with less than two years of job history. Exceptions and flexible programs are available for recent graduates or re-entering the workforce.

Q: Do I Need to be at the Same Job for Two Years to Qualify for a Mortgage?

A: No, you don’t. Lenders typically look at your overall two-year work history, not just one specific job. You can qualify even with job changes or employment gaps.

Q: How do Lenders View Gaps in Employment?

A: Gaps are acceptable as long as they are explained. For short gaps (under six months), you’ll need at least 30 days of income from your current job. Most lenders require six months of steady work for longer gaps at your new job.

Q: Can Recent College Graduates get a Mortgage with Short Employment History?

A: Yes, recent grads can qualify! Lenders often count your time in school as work history. You’ll need transcripts and proof of employment, like an offer letter and pay stubs.

Q: Can I Qualify for a Mortgage with Multiple Job Changes?

A: Yes, frequent job changes don’t automatically disqualify you. Lenders care more about stable or increasing income. Career advancements or higher-paying roles can strengthen your application.

Q: What if I Just Started a New Job? Can I Still Get a Mortgage?

A: Absolutely! If you’ve started a new job, lenders typically require your first paycheck and an offer letter showing your salary, job title, and start date.

Q: Can Part-Time or Multiple Jobs Count Toward my Mortgage Application?

A: Yes, part-time and multiple jobs can be used if you’ve held them for at least two years. Lenders will average your income over that time to determine how much you qualify for.

Q: What Happens if my Income has Recently Decreased?

A: A drop in income can make approval harder, but you’re not out of options. Provide a letter explaining the decline and show that your current income is stable. Savings or a strong credit score can also help.

Q: What Types of Loans are Best for Borrowers with Short Employment History?

A: FHA loans, VA loans (for veterans), and non-QM loans are great options. These programs offer flexible requirements for borrowers without a traditional two-year job history.

Q: How Can I Improve my Chances of Getting a Mortgage with Short Employment History?

A: If you’re trying to get a mortgage with short employment history, there are a few things you can do to boost your chances. First, save up for a bigger down payment; this shows lenders you’re serious. Next, work on improving your credit score—paying bills on time can help with that. Also, gather your documents, like pay stubs and tax returns, and be ready to explain your job situation if necessary. Finally, teaming up with a good lender, like Gustan Cho Associates, can help you navigate the process.

This blog about “Mortgage With Short Employment History Lending Guidelines” was updated on January 27th, 2025.