Getting Mortgage Approval With A New Job
If you have just switched a job or moved to a new location for a new job, buying a home is one of the biggest decisions that you may make. You need to be prepared for the process, and documentation requirements and not just jump in without understanding the mortgage process in such scenarios.
Relax! Drew Mortgage, one of the best Massachusetts mortgage companies, is here to help. We have put together a list of things that you should know about mortgages before applying for it a new job.
How Do Mortgage Lenders Look At Employment?
Employment is a big factor in mortgage lending. It can be the deciding factor for whether or not a person gets approved for a loan. Lenders look at employment status as well as credit score to determine whether or not someone is eligible for a loan. They tend to focus on whether or not an applicant has a stable job history. The lenders also look at how long the applicant has been with the company and whether or not they have a good track record. For lenders, the best loan applicants are those who have steady jobs, and incomes, and can repay their loans on time.
How Long Do I Need To Be Employed For Approval?
Most mortgage lenders ask for at least two years of experience in the current job to get mortgage approval. This is to make sure that borrowers are well-prepared for the financial commitment that they are taking on. Your mortgage lender is most like to ask for the following documents.
- Tax returns (federal and income)
- The 1040s
- Recent pay stubs
- Current Employer’s Written or verbal VOE
They also want to know that you have enough money saved up and have an emergency fund so that in case of an unforeseen event, you can still manage the payment of the loan without any problems.
Does Switching Job During The Mortgage Process Impact Approval?
If you get a new job in the middle of the mortgage process, your lender may re-evaluate your application for a new loan. Your lender may do this if they feel like there is too much risk involved with directly approving the loan due to a change in employment status. The best way to avoid this problem is to contact your lender and ask them what they need from you in order for them to approve your application.
The Possible Challenges in Mortgage Approval
When people switch from high-paying jobs to lower-paying jobs, it is a red flag for the mortgage lender as this could mean that the person is struggling with their finances and may not be able to pay their loans back.
If you are switching from a stable industry to an unstable one, mortgage lenders may give another thought to your mortgage application.
If you have multiple gaps in your employment history, mortgage lenders are more likely to deny your application.
If your income type changes from salaried to commission-based or hourly pay, it could raise a red flag for mortgage approval.
When applying for a mortgage, it’s best to ensure that you meet the lender’s eligibility criteria. This will allow you to be preapproved, which will make it easier for you to find the right loan when you’re ready to apply. Try to get pre-approved. For those new to mortgages; Pre-approval is a step in the mortgage process that is not mandatory but can be helpful in saving time and money. Look for reliable and reputed mortgage lenders in Massachusetts. At Drew Mortgage Associates, we can help you with different mortgage plans based on your eligibility and financing requirements. Feel free to consult us and get started with the mortgage approval process soon!