Getting a Mortgage with a New Job
When applying for a mortgage, having a new job can impact the process, but it does not mean that you will not be able to secure a loan.
How long do you have to be employed to get a mortgage loan?
Traditionally mortgage lender will want to review two years of employment history. But this does not mean that you must have the same job for two years or even be employed for two years. The duration of employment required to buy a house can vary depending on the lender and the specific circumstances. While there is not a fixed rule for how long you have to be employed, lenders generally prefer borrowers with a stable employment history. However, it is possible to obtain a mortgage even if you have recently started a new job. Here are a few common scenarios:
- Changing jobs within the same industry: If you have recently changed jobs but stayed within the same industry or field, lenders may view this positively. It demonstrates a level of expertise and familiarity that can mitigate concerns about job stability.
- New position within the same company: If you have been employed with the same company for a significant period, typically two years or more, lenders may consider you more favorably. This shows stability and a consistent income source.
- New role after graduation: If you just started a new job after graduating from a university, trade school, or an education program designed to help you obtain a job in a specific field, lenders will typically look favorably at that. Commitment to education shows that you are prepared for long term employment.
- New job after military service: US military service is viewed by lenders as employment and it is common for service members to begin new employment after being discharged from the military.
There are many other situations where a new job may not prevent you from obtaining a mortgage loan for a home. Lenders consider various factors beyond just the duration of employment. These factors include your income, creditworthiness, down payment, and overall financial situation. If you have a stable income, a good credit score, and a sufficient down payment, it can improve your chances of being approved for a mortgage, even with a shorter employment history.
Here are some key factors to understand and consider:
- Stability and income: Lenders typically prefer borrowers who have a stable employment history. However, if you have recently started a new job, lenders may consider other factors such as your income stability, industry experience, and future employment prospects. A higher income can also compensate for the shorter job duration.
- Probation period: Some lenders may require you to have completed the probation period of your new job before approving a mortgage. This period can vary depending on the lender and the type of employment contract.
- Creditworthiness: Lenders will also assess your creditworthiness, which includes your credit score, credit history, and existing debts. Maintaining a good credit score and managing your debts responsibly will increase your chances of obtaining a mortgage.
- Down payment: The down payment amount can play a significant role in the mortgage approval process. Having a larger down payment can offset concerns about your new job by reducing the lender’s risk. Aim to save a substantial amount to strengthen your application.
Each lender has its own criteria and policies, so it is crucial to understand lenders’ requirements and available options. By addressing these factors and demonstrating your financial stability, you can increase your chances of securing a mortgage even with a new job.
How to get a mortgage if you just started a new job?
If you have recently started a new job and are looking to get a mortgage, here are some steps you can take to improve your chances:
- Evaluate your financial situation: Assess your financial stability and readiness for homeownership. Consider factors such as your income, savings, credit score, and existing debts. Make sure you have a clear understanding of your financial position before proceeding.
- Gather documentation: Prepare all the necessary documentation related to your new job. This typically includes your offer letter, employment contract, and recent pay stubs. These documents will help demonstrate your income stability and earning potential to the lender.
- Build a good credit history: Having a solid credit history is crucial when applying for a mortgage. Make sure you have been making payments on time and keeping your credit utilization low. If you have limited credit history, consider building it up by using a credit card responsibly or taking out a small loan.
- Save for a larger down payment: Saving for a larger down payment can offset concerns about your new job and increase your chances of mortgage approval. A higher down payment reduces the lender’s risk and shows your commitment to the investment.
- Research lenders: Look for lenders who are more open to considering borrowers with a new job. Some lenders may have specific programs or policies tailored for individuals in your situation. It is wise to shop around and compare options to find the best fit for your needs.
- Consult a mortgage professional: Seek guidance from a mortgage broker or loan officer who can provide expert advice. They can guide you through the mortgage process, help you navigate any challenges related to your new job, and connect you with lenders who are more willing to work with borrowers in similar situations.
- Get pre-approved: Consider getting pre-approved for a mortgage before house hunting. Pre-approval involves providing your financial information to a lender who will assess your eligibility for a loan. This step can help you understand your borrowing capacity and make you a more competitive buyer.
Remember that while having a new job can impact the mortgage process, it does not necessarily disqualify you from obtaining a loan. Lenders consider various factors, including income stability, industry experience, and future employment prospects. By demonstrating your financial stability and taking the right steps, you can increase your chances of getting a mortgage even with a new job. Please reach out to me with any questions relating to your new job or potential employment changes at 312-296-4175 or email me at email@example.com. I lend in all 50 states and I am never too busy for your referrals!!
I have been in the mortgage industry since 1997 and I understand the anxiety that comes with making the most expensive investment of a lifetime. My objective is to be your advisor, to educate you and to make the mortgage loan transaction as transparent and as stress-free as possible. I enjoy establishing personal connections and work mostly by referral. I thoroughly explain the process and available options, and guide my clients to make choices that best fit their needs and financial goals. Once the underwriting begins I communicate regularly and keep my clients apprised of the loan status from the beginning through the end. My relationship with clients does not end at the closing table. You are my client for life and I am always available to answer your questions and provide you with guidance.