Q: In January I lost my job, and was out of work for about two months. I am currently working again, and actually making a bit more money than I was before. My wife and I want to buy a house in the next year.
Will my not having been at the same job for two years, or the fact that this is my third place of employment in six years, affect our qualifying for a mortgage? The position I’m in now is much more stable than before, as I am no longer a government contractor.
My credit score, the last time I checked, was in the 750 range. Thanks so much for you time, and I must say, I’ve gotten a lot of valuable information from your books!
A: The fact that you have a W2 is probably all you need to buy a house in terms of proving that you are employed. The two-year rule is generally for self-employed people, those in cash businesses or those that own their own businesses. Lenders do want to see that your employment is stable, however, but if you move from one job to another and the replacement job pays more, that’s usually something that a lender views as a positive.
The assumption mortgage lenders make is that if you’re employed, you’ll continue being employed.
Lenders are looking for homeowners to put down much more cash and have even better credit in order to get the best mortgage terms and the lowest possible interest rate available.
Be sure you have enough cash saved up and then go out and find a nice house that you’ll want to stay in for the next 5 to 10 years. Property prices continue to fall nationwide, so there are some great deals around.
This would be a good time to find a mortgage lender to review your finances and other documentation you’ll need to buy a home. Since you are not ready to buy a home, don’t go through the full application process, but take your credit score and credit history, if you have one, and show that to the lender or broker. Then you can have a discussion on what would be best for you going forward and if your job history would be a problem for you.