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Documenting your Job History for an FHA Loan

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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 to the rule. If you are at a new job, you will have some more verification to do than someone would have to do if they were at their current job for 2 years or longer. The longer you are at your job, the more consistency you display to the lender and the lower risk you pose to them. A person that hops from job to job shows inconsistencies and is considered a higher risk, but this does not mean that you will not be able to get qualified. Even if you have a new job and want to get FHA financing, you might be eligible, but you will have to prove your previous income in order for the lender to make an accurate decision based on all of your qualifying factors.

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Documenting your Job History for an FHA Loan

  1. 1. DocumentingyourJob HistoryforanFHALoan
  2. 2. 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 to the rule. If you are at a new job, you will have some more verification to do than someone would have to do if they were at their current job for 2 years or longer.
  3. 3. Verificationof2YearJobHistory If you have at least two years at the same job, you should have a fairly easy time verifying your employment. The lender will ask 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.
  4. 4. DealingwithaNewJob If you have a fairly new job, or you just have not been at your current job for the full two years, you will have to provide the lender with a little more verification in order to ensure that you are able to pay the loan back. You will also need to provide a history of where you worked or what you did during the time before your current job.
  5. 5. Afewreasonsforagapinyouremploymentthatare typicallyconsideredacceptableinclude: Stopped working to raise children Stopped working to go back to college
  6. 6. EffectiveandStable Income
  7. 7. What they want to know is that you have probability of continued employment. This can be demonstrated in a variety of ways including: A statement from your employer stating your probable continuance at the current job Proof of any training or education you have that qualifies you for the position Past employment history that shows your qualifications for the job
  8. 8. Even if you have frequent job changes, you might be able to get an FHA loan if you can show that the job changes were to make you better. They cannot be because you were bored at your current job.
  9. 9. WhenyoucanUse CommissionIncome Commission income is not always considered stable, so it is a grey area for FHA lenders. According to the FHA, if any commission positions are held for one year or less, they are not eligible to be used as effective income on an FHA loan.
  10. 10. Today,lendersaremuchmoreforgivingandflexible when it comes to qualifying borrowers for an FHA loan. As long as you can show an upward trend in your job history, even if there are many job changes, if they are always for a higher position or higher pay, you will be able to use them for qualifying purposes.
  11. 11. Finding the Best FHA Lender BestFHALender is a one­stop shop offering useful information about FHA loans and enabling customers to shop for multiple lenders. CLICK HERE TO LEARN MORE
  12. 12. Information Provided by Justin Mchood   He is Americas Mortgage Commentator and has been providing Mortgage commentary for over 10 years.
  13. 13. VISIT US! mortgage.info facebook.com/www.mortgage.info/ @_mortgageinfo pinterest.com/mortgage_info/ Hotline: 855 ­ 531 ­ 7677

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