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How Much Work History Do I Need to Qualify for a Mortgage?

by Don Rafner

Lenders consider several factors when determining whether to approve you for a mortgage loan. They want you to have a high credit score, low monthly debts and solid income. Lenders also want you to have a solid job history. If you haven't held a job for enough years, you might struggle to convince a lender to provide you with a mortgage loan.

Why Job History Matters

Lenders care about your job history for one reason: They only want to loan money to those borrowers who are most likely to pay back their home loans on time. Lenders consider borrowers who have worked in the same field for several years as less likely to lose their jobs. Borrowers who remain employed are more likely to continue making their mortgage payments every month.

Two Years the Standard

Most lenders prefer lending to borrowers who have worked in the same field for at least two years, believing they will more likely remain employed at their current companies or be able tp find a new job should they lose their current one. This is not an absolute rule, though. Different lenders have different employment history standards. Some place less weight on job history than they do on other qualifying factors.

Providing Proof

When you apply for a mortgage loan, you'll have to provide plenty of paperwork to your lender. This includes copies of your two most recent paycheck stubs, your last two years income-tax return statements and your two most recent bank-account statements. Your lender will also request proof of your employment. This usually comes in the form of a statement signed by your boss, supervisor or someone in your human-relations department stating your position, annual salary and years on the job.

Other Factors Matter, Too

You might be able to qualify for a mortgage loan even with a spotty job history if your finances and credit are strong enough. Most lenders consider FICO credit scores of 740 or higher to be excellent scores. If your score is that high, you might be able to convince a lender to overlook your employment history. Lenders also prefer giving mortgage money to borrowers whose total monthly debts -- including their estimated new monthly mortgage payments -- comes out to no more than 36 percent of their gross monthly income. If your debt-to-income ratio is lower than 36 percent, again you might have a better chance of convincing mortgage lenders to look past your job history.

About the Author

Don Rafner has been writing professionally since 1992, with work published in "The Washington Post," "Chicago Tribune," "Phoenix Magazine" and several trade magazines. He is also the managing editor of "Midwest Real Estate News." He specializes in writing about mortgage lending, personal finance, business and real-estate topics. He holds a Bachelor of Arts in journalism from the University of Illinois.

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