A lender will need to know your job history and it will be a major factor in determining whether you qualify for a loan.
Having a steady job helps you keep your promise to pay back a mortgage on time. If you have been working continuously for two years or more you are considered to have steady employment which is a plus. It is not necessary that you have worked for the same employer, just that you have been consistently employed for two years. Job moves that result in equal or more pay, and continue to use proven skills, are a plus for you.
Part of the information you will provide your lender is the name, address, and telephone number of all employers you have worked for in the previous two years. Using that information your lender will mail each employer, whether current or previous, a form called a Verification of Employment or VOE. A VOE asks each of these employers to provide the date you started working, your position, whether they will continue your employment, your current wage or salary, current and previous year’s earnings, whether you work overtime or receive bonuses, the date and amount of your last raise, as well as an area to provide comments on any extended leaves of absence.
If you have not been working continuously for two years, the mortgage lender will look for an explanation. There may be a good reason such as:
- You may have been recently discharged from the military.
- You may have just finished school. In this instance most lenders will consider your school years as employment history if you are working in your field of study.
- Your work may be seasonal, and you might have work gaps between the seasons.
- You may have been laid off because of a plant closing or downsizing.
- You may have had an illness that required time off or have taken a leave of absence under the Families with Medical Leave Act (FMLA).
- You may be in a line of work in which frequent job turnover can be customary such as the construction trades.
There may be other acceptable reasons why you have not been employed continuously for two years. Generally in any acceptable situation you will have the ability to demonstrate a consistent level of earnings with your tax returns.
If you have been fired for cause such as excessive absences, have long gaps of no employment (30+ days), or have dips in your income level that are difficult to explain, you may have difficulty getting approved for a mortgage.