Home Loan Determinants > Employment History
In this series of posts, we’ve talked about the three major factors that affect your ability to get a home loan, including your credit score, the debt you possess, and your down payment. In this final article, we’ll explore how your employment history comes into play when trying to get a mortgage approval. When you find your dream house and you’re approved, a Wright City Home Insurance policy can provide the peace of mind you need to protect your new home.
The last two years of your work history.
In almost all cases, loan professionals look at a 24-month block of employment, using this information to estimate your future income. So, if you received a substantial raise in the past year, the previous year’s income will still apply to your mortgage. The higher income may be weighted larger than the previous year’s, but the smaller salary will still apply. This also means that any future raises cannot (in most cases) be applied to your current mortgage application. The past 24 months is one of the largest factors for how your employment history affects your home loan, states Colorado Loan Officer.
Accepting a new job.
While it’s a common myth that you shouldn’t accept a new job prior to applying for a home loan, this isn’t entirely true. Yes, people with new jobs are more likely to default on a mortgage payment. However, this doesn’t mean you should pass up a better opportunity. Instead, just be prepared to show your income for the last two years.
Lenders see a change in industry as a red flag. Again, this isn’t a guaranteed denial of a mortgage, but statistically speaking, a new job in a new industry means more risk on their behalf.
About Sine Insurance Group
At Sine Insurance Group, we want to ensure that your belongings and your dwelling are protected. Our custom-tailored rental insurance policies are crafted specifically to meet your needs and provide peace of mind. For more information about our products, contact us today at (636) 947-1177.