How Long Do I Have to Work Before Applying for a Home Loan?
- Buying a house does require a steady income source. But being employed in itself isn't enough to qualify for a mortgage loan. Lenders take into account not only whether you're employed, but also how long you've been employed. Your mortgage loan application will inquire about current and past employers; and as a general rule, getting approved for a home loan requires 24 months of consecutive employment. Gaps in your employment history or a short employment history can prevent a loan approval.
- Mortgage lenders also check to see how long you've been with your current employer. Switching jobs before applying for a mortgage loan will not necessarily affect your home loan approval. Lenders consider your overall employment record. They look to see if you've had continuous employment, and they also consider whether you remained in the same field throughout these employment switches.
- Lenders use various methods to verify your employment record. If employed with a company, you will need to provide copies of your most recent paycheck stubs and W-2 forms with your mortgage application. Some lenders may require an employment or income verification letter signed by your employer to confirm dates of employment. If you're self-employed or operating your own business, submit complete tax returns from the past two years.
- Being continuously employed for at least two years indicates stability. Acquiring your first job and then applying for a home loan three months later will likely result in a mortgage loan rejection, because lenders can't assess whether you're capable of maintaining long-term employment. It's important to note that mortgage lenders vary; and while a two-year employment history is an industry standard, some lenders may approve your application with a shorter employment history. Finding this type of lender involves speaking with different banks and asking about their loan requirements.