When you apply for a home loan, mortgage lenders want to know about your employment history. They'll want to see that you have a steady income and at least two-year job history. Your employment history is one of the factors that lenders look at when they're considering your application to qualify for a mortgage.
It is possible to get a mortgage with less than 2 years of work history in certain situations. Lenders typically prefer a 2-year employment history but may make exceptions based on various factors. Recent graduates, career changers, and those with employment gaps may still qualify under specific circumstances.
Conventional home loans are arguably the most popular type of mortgage. They generally require at least two years of employment history to qualify. However, less than two years may be acceptable if the borrower's profile demonstrates “positive factors” to compensate for shorter income history.
Gap Period
If you have had gaps in the past two years, lenders are most concerned by unemployment periods of six months or more. If you were out of a work for just a month or two, there may not be an issue with your mortgage approval.
Anything more than six months should be considered an employment gap. Employment gaps on a resume can be a cause for concern if you don't explain the reason for your gap in employment and the experience you gained during that time.
Key Takeaways. ✅ FHA loans require a two-year work history to demonstrate stable employment, but job changes and gaps in employment are generally acceptable as long as certain criteria are met.
With a $60,000 annual salary, you could potentially afford a house priced between $180,000 and $250,000, depending on your financial situation, credit score, and current market conditions. However, this range can vary significantly based on several factors we'll discuss.
and the complexity of the borrower's employment history [1]. To reduce the risk of any changes in employment status prior to closing, lenders may re-verify the borrower's employment approximately 10 days before the scheduled closing.
If you have money saved up or investment assets and can make a substantial down payment to ease lender concerns over your lack of income, you may be able to get approved as long as your credit history and credit score are good enough.
The Quick Answer. A $100,000 salary positions you within striking distance of homes priced between $225,000 and $300,000, but remember, it's not a one-size-fits-all answer. Your unique financial picture, creditworthiness, and the ever-changing housing market all play a role in pinpointing your precise affordability.
Yes. Getting a mortgage with less than two years of work history is possible through a non-traditional mortgage program called Non-Qualified mortgages or Non-QM. These loan programs have flexible requirements and provide an alternative mortgage solution.
Lenders prefer to see that you have at least two years of work history, as two years is considered enough time to demonstrate consistency, stability, and financial reliability.
Employers typically check work history during the hiring process, especially for jobs that require a high level of trust or specific qualifications. This often happens after you've made it through the initial stages and are being seriously considered for the position.
You are required to notify the lender of all employment and income changes. Your lender's decision whether to continue with the application may depend on whether you lose your job temporarily or permanently. For example, if you are suspended, you must explain in a letter when you expect to return to your job.
Mortgage lenders usually verify your employment by contacting your employer directly and by reviewing recent income documentation. The borrower must sign a form authorizing an employer to release employment and income information to a prospective lender.
While you're not required to disclose job changes to your lender after closing day, there are situations in which doing so could help you. For example, if you experience a job loss or job change that affects your ability to make payments on time, your loan servicer can work with you or guide you to resources for help.
Prior to closing
Many lenders will repeat income and employment verifications before closing to confirm nothing has changed. This helps the lender reduce risk of a loan buyback. Borrowers should note: experts generally recommend that they not change jobs during the mortgage loan process if they can help it.
The house you can afford on a $70,000 income will likely be between $290,000 to $360,000. However, your home-buying budget depends on quite a few financial factors — not just your salary.
For a job that pays a $60,000 annual salary, the hourly wage is $28.75 per hour.
According to the 28/36 rule, you should spend no more than 28% of your gross monthly income on housing and no more than 36% on all debts. Housing costs can include: Your monthly mortgage payment. Homeowners Insurance. Private mortgage insurance.
You may be denied for an FHA loan if you have declared bankruptcy but you have not had the bankruptcy discharged. You may be denied if you are delinquent on federal taxes or otherwise owe money to the federal government but without an approved payment plan.
Understanding employment history for mortgage requirements
Lenders want to ensure that you'll be able to repay them on time. This is why employment requirements for many mortgages usually include a work history of at least two years, as well as income verification.
Conventional loans
If you start a new job, lenders usually accept a job offer letter with a new employer (same industry or line of work) that can be used to verify your new employment, as well as a college transcript showing your education leading up to your current job.