FHA home loans have been a go-to option for many interested home buyers because of their attainable guidelines and low down payment requirements. But one thing that sets this program apart is that they have flexible requirements when it comes to your employment.
But keep in mind that when you get a mortgage through the FHA, your 2-year employment history still matters. This is a standard among different home loan options. Lenders would want to see consistency as well as reliability as much as possible.
This doesn’t mean that you can’t qualify to get a mortgage with the FHA if you have employment gaps. They wouldn’t automatically disapprove your application if they see that you’ve recently changed jobs, or if you’re a part-time/self-employed individual.
As long as you meet their eligibility and requirements, you shouldn’t have to worry. In order to know what the FHA’s employment guidelines are, do your research. Let’s discuss these guidelines one by one.
Addressing the gaps
Having gaps in your employment doesn’t hinder you from getting a mortgage with the FHA. But they have specific guidelines on what situations are considered. As long as you meet these guidelines, it would be easier for you to get a mortgage.
If you have at least worked for two years before the gap, you can definitely qualify for an FHA home loan. Lenders would want to have a basis to measure your consistency as a borrower. If you don’t have a 2-year employment history prior to the break, they would not be able to determine how reliable you are in carrying out a mortgage.
Keep in mind as well that, lenders would want to see you employed for at least six months before applying for a loan. This is if you have gaps for more than six months prior to your current employment. Also, it’s not ideal to have a one year break from work with a low credit score.
Allowing job changes
It’s still possible for your to get a mortgage even if you’ve changed jobs. Ideally, you wouldn’t want to get stuck in an unstable or dead-end job. If you follow the rules set by the FHA, having job changes is acceptable.
First, it poses a red flag if you have three different job changes within a year. But you can remedy that by considering a few things.
Lenders would want to see that your new job is more beneficial or better than your last. This could either be a higher pay, career advancement, or better employee benefits.
You are going to have to provide proof of training that will warrant your job changes.You have to be upfront about the reasons why you changed jobs. It’s never ideal to see that you changed jobs with no good reason at all.
Part-time and self-employed guidelines
Part-time employees are riskier for lenders. But as long as you prove your consistency by having a 2-year employment history, lenders might ease up a bit. Hourly employees need to have at least a 2-year employment history to show consistency as well.
In the case for self-employed borrowers, one year of self-employment history should be good as long as it’s backed up with a significant experience in the industry. For example: if you own a bakery, lenders would check if you’ve been employed as a baker prior to opening the business.
As long as you are able to document everything as well as back up anything that might raise flags from your lender, you would be able to have a good chance of getting a mortgage with the FHA.Ask our lenders about your mortgage options today.