This blog will cover and discuss how to calculate income for mortgage with multiple jobs. Homebuyers can qualify for a mortgage with multiple jobs and employment gaps. However, there are rules and restrictions regarding qualifying for a mortgage with multiple jobs. There are also regulations on gaps in employment. If you have an extended gap in employment, such as six or more months, you need to work on your new job for six months before you are eligible for a mortgage loan.
If you want to use the income of two full-time jobs to qualify for a mortgage, you must have worked at both jobs for two years. Otherwise, you can only use the income of one job. Borrowers can qualify for a mortgage with multiple jobs as long as the multiple jobs have been seasoned for two years. You can qualify for a mortgage with one full-time job and
Borrowers need to have a comprehensive two-year history of employment. You can be in different jobs for the past two years. You can have multiple part-time jobs and use all the income from the multiple jobs as qualified income as long as all the part-time jobs have been seasoned for two-years. Two of the deciding factor in whether or not borrowers qualify for a home loan is credit and income. In the following paragraphs, we will discuss qualifying for a mortgage with multiple jobs.
How Do Underwriters Approve Mortgage With Multiple Jobs?
Mortgage underwriters will review and examine the borrower’s past two years work and income history. The reason for examining the past two years of job and income history is because past history s a good indicator on the future. The mortgage underwriter needs to make an educated decision if the borrower’s current job and income will be stable.
Mortgage underwriters can downgrade an approve/eligible per automated underwriting system file to a manual underwrite if they see high risk such as large collections, high debt-to-income ratio, gaps in employment, declining income, and multiple jobs with a short span of time.
Underwriters have discretion on each file even though the borrowers gets an approve/eligible per automated underwriting system (AUS). The mortgage underwriter needs to determine if the current job status is likely to continue for the next three years. Mortgage underwriters have underwriter discretion in making this call with borrowers with applying for a mortgage with multiple jobs in the past two years.
Can I Get Approved For a Mortgage With Bad Credit
Consumers can have had prior bad history and low credit scores but as long as they have documented income, they will qualify for a mortgage loan. However, on the flip side, consumers can have the highest credit scores, even over 800 credit scores, and not a single late payment on their credit report but without a job and/or documented income, there is no way they will qualify for a home loan.
When the country is in a economic recession, employers do not want to hire full-time workers. Hiring full-time workers costs more versus part-timers. Many people who cannot get full-time jobs settle working multiple part time jobs to support their families.
Many people, after the 2008 Real Estate And Mortgage Meltdown, have lost their businesses and full-time jobs. Some hard-working Americans have lost their jobs where they have worked for decades. The older you get, the more difficult it is to restart your life. Bankruptcy rates soared to historic high levels. Many real estate lawyers learned bankruptcy law and changed specialty where they made a fortune. In this article, we will cover and discuss qualifying for a mortgage with multiple jobs.
Changes In The Mortgage Lending Industry
The mortgage industry lost over half its workforce due to the complete shutdown of sub-prime lending and the whole revamp and restructuring of the mortgage business with the implementation of the SAFE ACT and Dodd-Frank Act. This caused where mortgage loan originators had to go through testing. NMLS Mortgage Loan Originator applicants had to complete new federal and state criminal background as well as credit checks.
The older you get, the more difficult it is to either start a new career or get a new full-time job. Unfortunately, most employers prefer hiring younger candidates who have more energy, idea, and demand less money than older job applicants. Older people looking for full-time jobs often settle for multiple part-time jobs.
Many old-timers in the mortgage business who have been in the business for decades and have been out of school have been forced out of the mortgage business. New regulations got implemented after the 2008 financial crisis and housing meltdown. The main reason veteran mortgage loan officers reluctantly left the mortgage industry was because they could not pass the national NMLS exams.
Is It Better To Buy House During or After Recession?
The country suffered the longest recession since the Great Depression. Most folks who had no problems in finding full-time employment gave up looking for full-time jobs. Many consumers had to file bankruptcy and lost their homes through foreclosure and/or deed in lieu of foreclosure or short sale due to loss of job and many of hard-working Americans had to settle for menial jobs or multiple jobs just to make ends meet.
Homebuyers can qualify for a mortgage with multiple part-time jobs. However, in order to use two or more part-time jobs, you need to have been at both jobs for at least two years.
To this day, I know so many successful people who had great jobs or businesses who are underemployed. Many have multiple jobs just to keep a roof over their heads. The older you get, the more difficult it is to start a new career. Many older people often give up looking for new full-time jobs since employers prefer younger new hires. Many older job seekers take multiple part-time jobs tp take care of their families.
Can I Qualify For Mortgage With Multiple Part-Time Jobs?
Many have given up in finding full-time employment and have changed their lifestyle where they have multiple jobs. The good news is that these hard-working folks with multiple part-time jobs have recovered and whether they filed for bankruptcy or lost their homes, can now qualify for a mortgage with multiple jobs.
Prior bad credit such as prior bankruptcy, foreclosure, deed in lieu of foreclosure, short sale, late payments, repossession, collections, and charge-offs have no impact on mortgage rates. The biggest factor in pricing mortgage rates are credit scores.
Prior bad credit, prior bad credit, prior bankruptcy, prior deed in lieu of foreclosure, prior short sale, prior collection accounts are all no issues with qualifying for a mortgage with multiple jobs. Many borrowers are under the impression prior bad credit will impact mortgage rates. The biggest factor that impact mortgage rates are credit scores.
Qualifying For Mortgage With Multiple Jobs
Lenders consider job longevity as a compensating factor, which is a positive factor. The way creditors when granting credit is the longer borrowers had a job in the same field, the more secure he or she will be with steady future employment.
In order to use income from multiple jobs, you need to have been employed at both jobs for at least two years. If you have been working at one or the jobs for less than two years, that income will not count towards qualified income for a mortgage.
Full-time jobs are considered more secure than part-time jobs. There are different types of requirements with part-time jobs than there are with full-time jobs when it comes to mortgage lending guidelines.
Can I Get Mortgage With Gaps In Employment?
Borrowers with gaps in employment, the rules are as follows:
- If the borrower has been unemployed for more than six months and then got another full-time job, then borrowers need to wait six months in order for them to qualify for a home loan with the new job’s income.
- If borrowers have been unemployed for less than six months and then got a full-time job, then they need to wait until they provide 30 days’ paycheck stubs in order to qualify for a home loan.
If the borrower has a job gap exceeding six or more months and wants to return to his previous employer, there is no seasoning requirement upon getting rehired.
Mortgage With Multiple Jobs Other Than Full-Time Employment
With part-time jobs, it is different. In order to count part-time employment, borrowers need to have had the same part-time job for at least two years in order for them to qualify with the part-time job income. Borrowers who need to qualify for a mortgage with multiple jobs. Here are the following requirements:
- Qualifying for a mortgage with multiple jobs if the jobs are part-time jobs, each part-time job needs to have at least a two-year seasoning for the income to be used in income qualification
- Borrowers who have two full-time jobs, then one of the jobs will count as full-time employment income
How To Get a Mortgage With Two Full-Time Jobs
Homebuyers with two full time jobs can qualify for a mortgage using both full time jobs only if they have worked both jobs for two years. Otherwise, they can only use one full-time job and the a second full-time job does not count. The second full-time job needs to be seasoned for two years in order for both full-time incomes to count towards income for a mortgage.
Homebuyers can combine incomes of two families to purchase a house jointly. All borrowers who are going to go on the mortgage loan need to qualify in terms of credit guidelines for the mortgage loan program. In general, in case of joint ownership among two families, ownership is equally divided.
If a borrower has a second job seasoned for at least for a year but not quite two years, mortgage underwriters see that as a strong compensating factor. If you need to qualify for a mortgage with multiple jobs, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at firstname.lastname@example.org. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and during the holidays.
January 11, 2023 - 7 min read