When you purchase a home typically you will need to go to a bank and get a loan to cover the cost of the home. Rather than pay the previous homeowners a little bit every month, you pay the bank an agreed upon amount each month until the money you borrowed–and the collected interest–is completely paid back. These payments are considered mortgage payments.
Nowadays it is nearly impossible to purchase a home without getting a mortgage. With homes as expensive as they are, it is extremely rare that a person is able to purchase a home upfront and avoid a 10-20 year mortgage. This is why when you are considering buying a property, it is important to set yourself up so that you qualify for a mortgage. After all, banks do not give out mortgages to just anyone.
There are a number of factors that go into qualifying for a mortgage, such as credit history. The most important one is annual income. Banks need to make sure that you will be earning enough money to pay back what you borrowed. While this factor is easy to overcome when you have had a steady job that you will continue to hold for the foreseeable future, it because very difficult when your employment history is scattered and constantly changing.
People with massive gaps in their employment history are red flagged because it shows that their ability to hold a job is inconsistent. People who are constantly changing jobs show banks that they do not have secure, long-term employment. However, sometimes it just means that you’ve working your way up to your dream job, or were recently a student and couldn’t have full-time work at just one location. So, what can you do if you are one of these people?
The first big thing to do is to stay on top of your paperwork and send relevant copies to your lender. If you have started a new job or will start one during the mortgage application process, let the lender know upfront and send them copies of your new contract and first pay stubs right away. If your pay is inconsistent–such as when it relies on commission–track trends and overall averages. Give the lender detailed reports, it will go a long way.
The second big thing to do is to get a letter of recommendation from your current or new employer. If they can give a testament to the security of your job and your hard worth ethic, it will go a long way in showing that your job is not just one more of many, but a lasting financial security blanket.
Best of luck!
Your Real Estate Professional,