If 2 Years of Job History Aren’t Required, Then How Many Are?
Are you in the market for a house, but worried about whether your job history is going to hold you back? You’re not the only one who has or will stress about this issue, which is why we’re here to clear up the age-old dilemma of whether you need 2 years of job history to buy a home. If it’ll do you any good to hear it, your job history isn’t the only thing being taken into account when it comes time to buy a home, there’s also your income, assets, credit, partner(s), etc. being factored in.
While some individuals would be quick to drop the idea of becoming a homeowner until they’ve reached that 2-year mark, here’s why you shouldn’t. For one, when it comes time to buy a home it seems that nowadays there’s an endless amount of financing, each with its own set of requirements; one of those options could potentially fit your needs. Secondly, why would you drop the idea of becoming a homeowner if you haven’t even begun to research whether the 2-year requirement is an absolute must or not; remember, when it comes to milestones like this, it’s important to research.
Why is 2 years of job history the standard anyways? Technically, when you’re applying for a loan of this caliber, it’s important to have a strong employment history that proves that you have a steady income. Remember, it’s a lender’s job to assess risk and avoid as much of it as possible and a great way to avoid risk is to see if you can realistically pay this amount back; what better way of seeing if you can afford this type of loan, then with your job history. While 2 years of job history is the standard, some loans allow as little as 6 months of job history, but other requirements have to be met.
How is Job History Determined?
Say it with us, “you do not have to stay at the same job for years on end just to qualify for a housing loan.” According to The Mortgage Reports, “lenders will accept a two-year history of consistent work in the same line of work, if not at the same job.” For example, say you were working as an accountant in a construction business, to being a staff accountant in a software company, that would be acceptable because you’re continuing in the same line of work. However, if you went from being an accountant to being a personal trainer, to a graphic designer, to a freelance writer within three years that would be a red flag. Overall, just keep consistency in mind because it’ll save you from a headache in the future.
Can I Qualify For a Mortgage Loan If I Just Started a New Job? Can I Qualify Without a Job?
Remember how we mentioned that there are some exceptions to the two-year standard? Well, suppose that you had a career that was in demand, with a high income, that could be enough alone to bypass the two-year standard. For example, if you were just hired on as a petroleum engineer or financial analyst, both of these fields pay their new hires upwards of $70,000; once an individual has experience in either of these fields their earning potential reaches around $130,000 to $200,000.
Maybe you’re not starting a career, but in between jobs, there’s still a chance that you could get approved for a mortgage. Although not all jobs give their new hires offer letters, the ones that do usually contain a salary amount listed within. Lenders can approve consumers based on their offer letters, but again it all depends on the income and whether or not they meet their other requirements.
Is there any way that I could get approved for a home loan if I don’t have a job at all? Sadly, you cannot get approved for a home loan if you’re just relying on unemployment, but there are a couple of other ways to bypass the two-year standard.
- If you’re by chance buying a house with a partner or spouse, but you don’t have employment, then your approval chances are based completely on their income and credit.
- If you currently receive money from long-term disability insurance or social security disability insurance you could also qualify, but you’d have to prove that the income will continue to come in for at least the next three years.
- There are also other forms of income that could suffice, like pension, social security, annuity income, and alimony payments.
- Maybe you’re big on investing, if you make enough in dividends and interest payments, then you could also qualify, but it needs to be a significant amount if it’s your only source of income.
Do Different Loans Have Different Job History Requirements?
FHA loans have different job history requirements depending on the loan product. For example, some FHA loans allow for six-month job history, while other products require a two-year work history in the same line of work. It’s important to consult with a lender to understand the specific job history requirements for the particular FHA loan
The job history requirements for a VA Loan are a little more lenient than other types of home loans. Generally, lenders will accept a one-year job history in the same line of work, or two years of consistent work in the same line of work, regardless of whether you’re employed at the moment or not.
USDA loans have different job history requirements depending on the loan product. For example, some USDA loans allow for six-month job history, while other products require a two-year work history in the same line of work. It’s important to consult with a lender to understand the specific job history requirements for the particular USDA loan.
The job history requirements for a Freddie Mac or Fannie Mae loan are a little more lenient than other types of home loans. Generally, lenders will accept a one-year job history in the same line of work, or two years of consistent work in the same line of work, regardless of whether you’re employed at the moment or not
For a conventional 97 loan, the job history requirements are a little more lenient than other types of home loans. Generally, lenders will accept a one-year job history in the same line of work, or two years of consistent work in the same line of work, regardless of whether you’re employed at the moment or not.
So if you’re worried that your job history might be holding you back from becoming a homeowner, don’t be. There are many different ways to get approved for a mortgage loan, even if you don’t have a two-year work history in the same line of work. Consult with a lender to see which loan product
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