Don’t Let Your Past Employment History Affect your Mortgage
The first rule to secure a home loan is you should have 2 years past employment history. This is the thinking of most of the people. We will help you to get you around your sketchy employment past.
Stay in the Same Industry
The true meaning of 2-year past employment history is you need a history of working for at least 2 years consistently. In these 2 years, you can also change your job but that doesn’t mean you change your job from one industry to other.
For example, you are a doctor in any hospital now and have been for one year. If next year you will choose to be a teacher in a school that’s not the same industry for you and you will not go back to the same position which you have got in the hospital. But if you are in hospital as a doctor and switched to another hospital in the next year, So it might be better for you. You might have better experience. Mortgage loan officer will always look for predictably and consistency. Mortgage loan officer always wants the job in which you are good and industry in which you have experience. If you have a new job but in the same industry then you have more chances to succeed. According to the Mortgage loan officer, this means you can pay your home loan on time.
Avoid Gaps in Your Past Employment History
Mortgage loan officer doesn’t like the gaps in employment. If you don’t have the job then it will be a big red flag for mortgage loan officer. There are some cases like:
Unemployment for more than Six months-In this case, mortgage loan officer will don’t allow you to have a home loan until you got a new job for at least six months and after your six months work experience you can apply for a home loan.
Unemployment for less than Six months-In this case, mortgage loan officer will allow you to have a home loan after just 30 days at the new job but within the same industry of your work.
You should have a valid reason behind the gap in employment. No matter what was the situation at that time but mortgage loan officer will require the full explanation for your gap in employment. Mortgage loan officer will ask you some questions about gaps in employment like Did you fall ill and had to stop working? Or they can ask Did you leave or were you let go? Just keep in mind that you should have plenty of proof that you can show with your answer.
Look Ahead to Raises
You should tell your mortgage loan officer if you are sure that you have a raise in the future. But for this, you have to provide a valid proof of the raise. For example, your employer can show the details of your raise, including the intended date by writing a letter to the mortgage loan officer. It will be easy for you to qualifying if you have a higher income.
Create Compensating Factors to Make up for Your Past Employment History
You can show your compensating factors to the mortgage loan officer to overlook your past employment history. These things are called “make up” for your sketchy past employment history. From showing these factors you can get a mortgage loan officer on your side. By these factor mortgage loan officer will have the reassurance that you can pay the home loan payments. Compensating factors are:
- High credit score
- Ample assets you can use for reserves
- Low debt ratio
Figure Out Your 2-Year Average
Mortgage loan officer will take a 2-year average of your income. It will be easy for you and for mortgage loan officer to calculate your job experience If you had the same job for last 2 years. You will have to show W-2s from each job which you have done over those 2 years to the mortgage loan officer.
Final Thoughts
If you don’t have a job then make sure that you should stay on top of your finance. If you default on your loans, then you will damage your credit and then you will have an even harder time securing a loan. You should be honest with your mortgage loan officer. 3CALoan local mortgage broker provides no tax return home loan which is also called no tax return, without tax return, private hard money home loan, private hard money loan, bank statement home loan, bank statement loan, equity loan and many more. We help our customers every step of the way. We prioritize informing and educating our clients about the home buying process. Our client’s happiness and confidence upon closing a deal reflect our excellent quality services. To find out more information about mortgage and how we can help, contact us at (818) 322-5626.
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