How to Get Approved for a Mortgage with a New Job: A Complete Guide

Starting a new job is an exciting time, but it can complicate getting approved for a mortgage if you’re also looking to buy a home. Most lenders want to see two years of stable employment history to ensure you have reliable income to make your loan payments. So how do you go about qualifying for a home loan right after taking a new job?

In this comprehensive guide, we’ll explain what lenders look for when reviewing your work history, steps to take when job changing, what documentation you’ll need, and tips to boost your approval odds when seeking a mortgage with a new job.

Mortgage Eligibility with a New Job

When you apply for a home loan, here’s what lenders evaluate regarding your employment:

• Length of employment – Lenders generally prefer a 2-year history with the same employer. New jobs may require more documentation.

• Job stability – Underwriters want to see you’re likely to remain employed to repay the loan. Frequent job hopping can be a red flag.

• Income – Your salary, hourly wages, and other earnings must be sufficient to cover the new mortgage payment and other monthly debts.

• Job verification – Mortgage lenders will contact your employer to verify your employment status, title, salary, and start date.

While meeting general eligibility standards takes discipline and strong personal finances, securing a mortgage right after starting a new job is feasible with some extra planning.

How Long Until You Qualify for a Mortgage After a New Job?

Many conventional lenders want borrowers to be at their current job for a minimum of 12 months before applying for a mortgage. However, it’s possible to qualify much faster than that.

Here are some common timeline scenarios:

• 1 month – The soonest you may potentially get approved after starting a new job, but more typical is 2-3 months.

• 3 months – After 3 months at your new job, approval becomes more likely if you meet other requirements.

• 6 months – At this point, underwriting should go smoothly with adequate income and good credit.

• 12-24 months – Once you hit this range, your new job is no longer considered “new” by lenders.

The right timeline for you depends on your specific circumstances. A strong credit profile allows faster approval. We’ll cover more tips for getting a mortgage soon after starting a new job later in this guide.

Documentation Needed for Mortgage Approval with a New Job

When underwriting a new job mortgage application, lenders will request documentation above the typical pay stubs, bank statements, and tax returns. Here are some extra documents you should anticipate providing:

• Offer letter – This should clearly state your new job title, salary, start date, and any probationary period. Make sure it’s signed and dated by you and the employer.

• Contract – If you have an employment contract instead of an offer letter, provide this to show contracted pay and duration of employment.

• VOE form – The lender will send a verification of employment form to your new employer to confirm your status.

• Previous W-2s – Provide W-2s from the past 2 years to show previous income stability.

• Tax transcripts – The underwriter may request IRS transcripts to verify past income.

• Job training certificates – If transitioning careers, offer certificates or training documents to support your skills and training for the new role.

Providing as much documentation as possible compensates for your shorter time in the new job.

Tips for Qualifying for a Mortgage With a New Job

Though qualifying guidelines are more rigid, getting a mortgage right after starting a new job is possible. Here are tips to improve your approval odds:

• Make a larger down payment, ideally at least 20% or more

• Highlight ample cash reserves beyond the required minimum

• Seek a co-signer with established income and credit

• Shop with lenders familiar with new job mortgages

• Get pre-qualified to confirm you meet preliminary requirements

• Be conservative when estimating your new income until you have a few paychecks

• Explain any job gaps or changes in your work history

With proper preparation, a new job at the time of your home purchase won’t automatically disqualify you from financing.

Types of Mortgages to Consider with a New Job

Certain mortgage programs offer more flexibility for new job buyers:

FHA loans – Require just 12 months of job history compared to 2 years for conventional loans.

VA loans – Provide low qualifying requirements for veterans, making them a top choice when starting a new career.

USDA loans – Have flexible underwriting for low-to-moderate income borrowers in rural areas.

Renovation loans – Allow you to finance home improvements to build equity. Useful if your income or credit need improvement.

Portfolio loans – Non-conforming mortgages held by the lender instead of sold to investors. May offer more leniency.

Alternative income loans – Use bank statements or assets instead of income. But require higher down payments and rates.

Self-Employed Job Mortgage Challenges

If your new “job” is being self-employed – as a contractor, gig worker, consultant, or owning your own business – qualifying for a mortgage becomes more difficult.

Here are typical requirements for self-employed borrowers:

• 2 years of consistent self-employment income

• 2 years of business tax returns and 1099 or W-2 forms

• Year-to-date profit/loss statement

• High down payment and cash reserves

Since your income relies solely on you instead of an employer, expect much stricter documentation of your earnings. But once you’ve built a 2-year history of 1099 or Schedule C income, mortgage approval is certainly possible.

New Job Financing FAQs

How long do you have to be at a new job to buy a house?

Most lenders want 12-24 months at your new job, but exceptions can be made if you have good credit, reserves, and solid documentation.

Will switching jobs affect mortgage approval?

As long as your new job maintains similar income, switching alone shouldn’t affect approval. Gaps between jobs or pay cuts may raise concerns.

How can I improve my chances of qualifying for a mortgage with a new job?

Making a larger down payment, having ample reserves, maintaining good credit, obtaining a cosigner, and providing strong income/employment documentation help improve the chances of approval.

What credit score is needed for a mortgage with a new job?

While guidelines vary by lender, you’ll typically want a credit score of at least 620-640 to have the best shot at qualifying for a new job mortgage. The higher, the better.

Can I get a mortgage right after changing careers?

Switching to a new industry often requires starting back at the bottom in terms of seniority and salary. So getting a mortgage immediately after changing careers can be challenging. Building up your earnings for 12-24 months first is recommended.

The Bottom Line

Getting approved for a home loan right out of the gates with a new job usually requires some finessing. While lenders rightfully want to see income stability, take comfort that hundreds of thousands of borrowers in your shoes navigate this every year. With prudent preparation, assembling the right documentation, and understanding what lenders look for, you can set yourself up for success.