Employment History

EMPLOYMENT HISTORY

GAPS IN EMPLOYMENT: MORTGAGE QUALIFICATION

All mortgage lenders require a two year employment history from mortgage loan applicant.  However, you do not have to have two years of continous employment history from the same employer.  You can have gaps in employment and still qualify for a mortgage loan.  For example, many mortgage loan applicants can take time off work due to going back to school, periods of unemployment, periods of taking time off due to medical issues, maternity leave, and other reasons.  Mortgage loan applicants can also have a series of temporary jobs in the past two years and eventually have a full time job.  There are situations where a mortgage loan applicant can have several years of unemployment and go back to working full time.

2 Year Employment History

Many mortgage loan applicants think that in order to qualify for a mortgage they need two years of employment history with the same employer.  A solid continous employment history with the same employer does show stability and most mortgage lenders prefer that.  However, during tough economic times, many folks change jobs, change careers, and get laid off or companies they work for shut down and they often need to find other employment.  The 2 year employment history requirement from mortgage lenders is that a mortgage loan applicant needs to have at least a two year work history.  For example, if a mortgage loan borrower started working full time in April 2010 and quit his job in April 2011 and did not go back to work until April 2014 and is still employed, this mortgage loan borrower will qualify for a mortgage loan because he has a two year employment history.  This mortgage loan borrower does not have a continous 2 year employment history but does have an overall 2 year employment history and will qualify for a mortgage loan.

Gaps In Employment

There are rules and regulations when it comes to gaps in employment. If a mortgage loan applicant has gap in employment for six months or less, then they are okay and can qualify for a mortgage loan as long as they have a full time job.  They will need to provide 30 days of pay check stubs in  order to close on their home loan.  If the mortgage loan applicant has been unemployed for six or more months, then the mortgage loan applicant needs to work in his new job for at least six months in order to qualify for a residential mortgage loan.

Part Time To Full Time Employment

In order to use part time income, the mortgage loan applicant needs at least to work on his or her part time job for at least two years. Qualifying for mortgage with short employment history with part time job will not work if the borrower does not have a two year part time income history with the same employer. However, if a mortgage loan applicant goes from a part time job position and gets promoted to full time status, the mortgage loan applicant will qualify for a mortgage loan as long as the full time status can be verified through a verification of employment.

Hourly Income To Salary Income And Job Promotion

Many times mortgage loan applicants go from hourly income to salary income due to a job promotion.  In cases like this, the borrowers wages will not be averaged and the new salary or promotion income will be used to qualify for debt to income ratios. Qualifying for mortgage with short employment history may be a problem if the borrower has had a part time job. Part time jobs needs to be seasoned for at least two years in order to be used for income by mortgage underwriters. Qualifying for mortgage with short employment history is an issue if the part time worker borrower has not been in the same part time job for at least two years.

Declining Income In Qualifying Mortgage With Short Employment History

Declining income is an issue when it comes to qualifying for a mortgage loan.  A substantial decline in income can disqualify a mortgage loan borrower from qualifying for a home loan.

Related> Can you qualify for a mortgage with gaps in employment?

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The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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