topic Re: Employment History Requirement - Mortgage Approval Question in Mortgage Loans

Employment History Requirement - Mortgage Approval Question

TDH0820 — Fri, 02 Jul 2021 21:38:10 GMT

SCORE - 740s across the board

Income: 180,000 Bonus 45,000

DTI:

Down Payment: 10%

Cost of Home: $700,000

First Time Home Buyer here. *I don't plan on buying immediately* I was laid off due to COVID. At my current job since June 2020, so I have been here for over a year. Looking to purchase a home. Email a few local places and they haven't gotten back. Do they want 2 years of current employment? Or do the tax returns justify the historical earnings from my previous job?

Re: Employment History Requirement - Mortgage Approval Question

ShanetheMortgageMan — Fri, 02 Jul 2021 21:47:33 GMT

If you've been employed for over a year now you should be fine using your employment & it's salary to qualify. At most probably would just need to write a letter of explanation for the job gap.

To use bonus income usually you need to have received it for the past 2 years, although less than 2 years can be acceptable as long as there are positive factors to offset the shorter history.

Tax returns are rarely needed, but be prepared to provide 2019 & 2020 W-2's.

Re: Employment History Requirement - Mortgage Approval Question

Anonymous — Sat, 03 Jul 2021 23:34:47 GMT

Underwriter here - conventional loans will want a two year job history but it doesn't all have to be at one job. Overall the job history/income just needs to make sense. If you had a gap you would just need to explain it in a signed and dated letter of explanation. If you were doing a Jumbo loan (loan amount being higher than conventional limits) - some investors do require you to be at current job for at least 6 months but it looks like that wouldnt be a problem for you.

To have any bonus considered - you would need a 24 month history of getting bonus income. They will take an average of the 24 months. If the bonus is declining they may use only year to date or none at all depending on the decline.

Re: Employment History Requirement - Mortgage Approval Question

Anonymous — Sun, 04 Jul 2021 14:46:23 GMT

Hi There,

This will depend on what company you end up at. If you do a standard bank, they are pretty unwavering at guidelines. They'll want a 2 year employment history and will deny you if you don't have it.

The thing is, FNMA doesn't require a two year employment history. The absolute minimum is 1 year so you can qualify for a conventional mortgage in that aspect just keep in mind many lending institutions will not lend to you without 2 years. See above with an underwriter that they require two years. Both companies I worked for I was given the leeway to use just one year.