Getting a Home Loan With a New Job: Everything You Need to Know

Starting a new job can be an exciting time But it can also make getting a home loan more complicated Many lenders want to see two years of steady employment before approving a mortgage. So what can you do if you need to buy a house soon after beginning a new job?

As a mortgage broker with over 10 years of experience, I’ve helped countless clients navigate this process. In this article, I’ll walk through everything you need to know about qualifying for a home loan with a new job.

How Mortgage Lenders View New Jobs

When reviewing a mortgage application, lenders look at your income, assets, debts and credit history. Your employment is a critical part of this assessment.

Lenders prefer to see at least two years of stable income in the same line of work This helps demonstrate you can repay the mortgage long-term

But having a shorter work history doesn’t automatically disqualify you. Here are some key points on lender requirements:

• Time in current role: Most lenders allow you to qualify with less than 2 years in your current position. But you’ll likely need at least 6-12 months on the job.

• Same industry: If you switched employers but stayed in the same field, that can count toward your 2 years of history.

• Explanation letter: Be prepared to explain any gaps or job changes in a letter to your lender.

• Additional docs: You may need to provide more proof of income, like an offer letter, contract, or pay stubs.

The bottom line? Getting a mortgage right after starting a job is possible. But you’ll need to put some extra work into reassuring lenders about your situation.

Tips for Qualifying With a New Job

If you need to buy a house but recently began new employment, here are some tips that can strengthen your mortgage application:

• Shop lenders: Some lenders are more flexible about income requirements. Shopping around can help you find the best fit.

• Build savings: Solid reserves show lenders you can weather income fluctuations. Aim for at least 3-6 months’ worth of mortgage payments.

• Check your credit: Good credit can offset concerns about new employment. Review your reports and improve your score if needed.

• Get co-signer: Adding someone with strong credit as a co-signer may help you qualify if you’re struggling on your own.

• Provide documentation: Offer letters, pay stubs, and contracts can verify your situation. Be ready to supply these.

• Consider loan types: FHA, VA, and USDA loans have more relaxed employment rules that new job buyers may qualify for.

With preparation and a willingness to provide extra documentation, getting approved for a home loan without two full years on a job is very possible.

Requirements by Mortgage Type

Employment rules differ depending on the loan program. Here’s a quick rundown of requirements for common home loans:

Conventional: Typically want 2 years of history, but will make exceptions. Need 6 months in current role.

FHA: Require 2 years of history, but not necessarily in same job. Also need 6 months in current position.

VA: Look for 2 years of work or military service. Active duty must be 1+ year from discharge.

USDA: No minimum time in current job. But must document 2 years of history with explanations for gaps.

Because guidelines vary, it pays to explore multiple loan types if your work history falls in a gray area.

What to Do If You’re Between Jobs

Switching jobs obviously isn’t ideal timing when trying to buy a home. But with the right approach, you can set yourself up for approval.

If you’re in between jobs, take these steps:

• Get offer letter – This provides proof of your new income source.

• Ask for employment verification – Some lenders will want this extra validation from the new employer.

• Provide pay stubs – Once you begin the new job, pay stubs further confirm your situation.

• Highlight other strengths – Remind lenders of your solid credit, assets, and down payment funds.

With preparation and a proactive approach, getting a mortgage approval when changing jobs is very feasible.

Alternatives If You’re Unemployed

Unemployment income usually won’t help you qualify for a mortgage. But you still have options to buy a home if you’re out of work.

Some alternatives I’ve helped clients utilize include:

• Using a partner’s income – You can qualify based on a spouse or partner’s earnings and credit.

• Tapping assets – Wealthy buyers can get loans using “asset depletion.”

• Investment/rental income – Income from your holdings may help you qualify.

• Retirement funds – Pensions, 401(k)s, Social Security, etc. can supplement other income.

• Disability benefits – SSDI and long-term disability often count toward qualifying income.

The right lender can help you craft a mortgage solution using these alternate income sources.

Partnering With the Right Lender

As a mortgage broker, my job is to guide buyers through every step of the home loan process. I know which lenders offer the most flexibility for those with new employment or unconventional situations.

If you’re struggling to qualify for a mortgage on your own, teaming up with an experienced broker or lender can make a huge difference.

I’m always happy to review your unique situation and lay out your options. My goal is to match each buyer with the optimal loan program and lender so you can become a homeowner.

Whether you started a new job last week or have been unemployed for months, there are solutions to get you into your dream home. Let’s connect today to outline the path that’s right for you.