documenting your job history for an fha loan
TRANSCRIPT
It is fairly well known that in order to get any type of loan,including an FHA loan, you need a 2-year job history. Of
course, as with every other program, there are exceptions tothe rule. If you are at a new job, you will have some moreverification to do than someone would have to do if they
were at their current job for 2 years or longer.
Verification of 2 Year Job HistoryIf you have at least two years at the same job, you should havea fairly easy time verifying your employment. The lender willask that you provide your most recent paystubs (typically 2),the last two years’ W-2s, and your tax returns if you have any
bonus or overtime income included in your pay.
Dealing with a New Job
If you have a fairly new job, or you just have not been at yourcurrent job for the full two years, you will have to provide thelender with a little more verification in order to ensure that youare able to pay the loan back. You will also need to provide ahistory of where you worked or what you did during the time
before your current job.
A few reasons for a gap in your employment that aretypically considered acceptable include:
Stopped working to raise children
Stopped working to go back to college
What they want to know is that you have probability ofcontinued employment. This can be demonstrated in a variety
of ways including:
A statement from your employer stating your probablecontinuance at the current jobProof of any training or education you have thatqualifies you for the positionPast employment history that shows your qualificationsfor the job
Even if you have frequent jobchanges, you might be able to getan FHA loan if you can show thatthe job changes were to make youbetter. They cannot be becauseyou were bored at your current
job.
When you can UseCommission Income
Commission income is not always considered stable, so it is agrey area for FHA lenders. According to the FHA, if any
commission positions are held for one year or less, they are noteligible to be used as effective income on an FHA loan.
Today, lenders are much more forgiving and flexible whenit comes to qualifying borrowers for an FHA loan. As long asyou can show an upward trend in your job history, even ifthere are many job changes, if they are always for a higherposition or higher pay, you will be able to use them for
qualifying purposes.
Finding the
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Information Provided by
Justin Mchood He is Americas Mortgage Commentator
and has been providing Mortgage
commentary for over 10 years.
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