Stability Of Income — A Simple Definition:

One of the factors that underwriters will consider on a loan application is “stability of income”.  The stability of income risk factor is one where the underwriter will attempt to measure how likely it is that your income may continue based on what your previous work history looks like.

Stability Of Income — An Expanded Definition:

While there may be a wide range of things an underwriter can consider regarding the stability of income, there are a few specific things that an underwriter will look at when considering the stability of income.

These include:

Gaps in Employment – If there are any gaps in employment that are longer than one month, be ready to provide an explanation.  If you happen to be a seasonal worker, allowances can be made but be ready to provide documentation.

The Probability Of Continued Employment —  What are the chances of continued employment at your current employer? What are the chances that you can get a similar job based on your qualifications, previous work history, education and location.

Frequent Job Changes — If you have a history of changing jobs, it isn’t necesarily a bad thing as long as you can document that you have changed jobs for advancements, more money, benefits or other related topics.  Remember, the underwriter is looking at the stability of income – not necessarily how long you have been at one company.

Stability of income is one of the important items that an underwriter will consider when you apply for a loan.  By keeping in mind the simple items of: gaps in employment, the probability of continued employment and frequent job changes you can be ready to provide explanations — before the underwriter even asks for them.

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