Home Loan – Do You Need a 2 Year Job History?

2 Year Employment History

2 Year Employment History

Many myths exist in the world of mortgage lending.  “I need 2 years at the same job to qualify for a mortgage” is on my list of favorites.  Perhaps only “I need 20% down” is better.  The average mortgage applicant believes that they need a 2 year history with the same employer.

I am happy to report this myth is 100% false.  Seasoned readers are thinking “a 2 year history with multiple companies in the same field is the key.”   Also, a myth.

Of course mortgage lenders appreciate a nice and steady 2 year job history.  24 months in a row in the same field with the same company does not disappoint a mortgage underwriter.  However, today’s fast paced worldwide economy almost encourages consumers move from one job to another.  In addition, people benefit occasionally by making a leap from one industry to another.

No 2 Year History in the Same Industry

Borrowers with a history of hopping from one job to the next in unrelated industries over 2 years have options.  A rule buried deep withing Fannie Mae‘s Conventional loan guidelines gives allows for company and industry changes within 2 years.

Fannie Mae’s leniency opens doors for many home-buyers that fall into this category.  Borrowers that demonstrate consistent income year over year regardless of industry or employer is eligible for a mortgage.  In fact, their income is considered as effective qualifying income for a new Conventional home loan.  This of course if paraphrased, but you get the idea.

Light shines brightly at the end of the job hopping tunnel.  For example, customer service, retail and restaurant workers typically move around a bit.   Assuming gross for each job is consistent, a mortgage underwriter may accept the income.  Even with the absence of employer and industry consistency the income may be used.

By Jeremy House
Google

 

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