First-time homebuyer? Home buying with a new job is easier than you think! Home buying can be confusing and intimidating at times, but if you work toward it as you would any other goal, you’ll find yourself living in the home of your dreams in no time. Follow these steps to get started on your path to homeownership today!
How long do you have to be employed?
What are the employment requirements for a mortgage loan? The general rule of thumb is that the borrower has to be employed for at least two years. But, in some cases, people without jobs may qualify on their own income. To find out more about whether or not you qualify on your own income, contact us at (123)-555-1234 and we'll be happy to help. We can walk you through what lenders view as work history, what lenders look for when approving loans without employment histories and more.
What type of employment income can be used?
When it comes to qualifying for a mortgage, income can come from employment, self-employment, business ownership, retirement or spousal income. Employment income can be from full-time or part-time jobs and the minimum number of months that must have been completed is usually three.
For example, if someone has been unemployed for six months then they need to have at least nine months of employment history in order to qualify for the mortgage.
Do I need a down payment?
There are many factors that lenders consider when determining whether or not to approve your loan application. One of the most important factors, however, is your credit score. Lenders will also look at your income and assets when deciding if they will approve the application.
If you do not have any assets or equity in other investments, then it may be difficult for you to qualify for a mortgage without any income.
Do I need perfect credit?
There are many misconceptions about what it takes to qualify for a mortgage loan. The truth is, there are many ways to get approved for a mortgage without perfect credit. Lenders want to know that your income will be stable and able to support monthly payments. If you have been laid off or unemployed, this does not necessarily mean that you can't get approved for a loan. It's best to apply as soon as possible after you've found employment, because the sooner your lender sees regular deposits in the bank account, the more likely they'll be to approve you.
For example: if someone has been out of work for two months, and has had four months' worth of deposit history (regular paychecks) before applying for a mortgage loan - they're more likely to get approved than someone who has just started working.
Will self-employment income suffice?
In order to qualify for a mortgage, borrowers are required to have two years of continuous employment history. Unfortunately, some people may have lost their jobs and may not be able to find another one in the time frame required by mortgage lending guidelines. However, there are still options available for those who want to take on the responsibility of owning their own property. Self-employment income can sometimes satisfy the income requirements needed to obtain a mortgage loan as long as it meets the lender's requirements and verification process.
Can I get help from family?
Yes, but the terms of your loan will depend on your family member's financial situation. If they have good credit, they'll be able to get the loan for you and have it in their name. If they have bad credit or no credit, then it will be difficult to find a lender that will approve them as an endorser. The best solution is to find someone who has good credit and can co-sign the loan with you. In some cases, even if your family member doesn't have great credit, lenders might still offer them the option to do this. If you're just starting a new job, there are usually employment requirements when it comes to qualifying for a mortgage. Lenders want to make sure that people are stable and responsible when they take out such a large sum of money like this so one requirement is typical that borrowers need two years' worth of W2s showing stable income before they qualify.
How much can I afford?
A good way to figure out what your income requirements are for getting a mortgage, start by looking at the qualifying on unemployment. For this, you'll need to know how much money you've been making every month for the last year. If it's less than $2,000 and not just for one or two months in that time frame, then your income requirements are likely too low. Next, talk to your lender about how lenders view work history. Some might require 6 months of employment while others may be willing to give more leniency depending on the type of industry you're coming from. The average length of time that most people who don't have a job get approved for mortgages is 3 months.
What else do I need to know about employment and home buying?
How long do you need to be employed? That's up to the lender, but typically it will depend on how much money and credit history you have. Do I need to be employed when I apply for a mortgage loan? No, not necessarily. But if your income is irregular or temporary, then qualifying for unemployment might be an option for you. What about student loans or any other debt obligations that I have outstanding? These don't disqualify your ability to qualify for a mortgage loan.