Can I Get a Mortgage If I Just Started a New Job?

Yes, you may be able to get a mortgage if you've just started a new job. While mortgage lenders prefer to see that you have at least two years of solid work history, they understand that employment changes can happen while buying a home. If you’re starting a new job or switching jobs while in the process of getting a mortgage, there may be a few extra steps you’ll need to take to prove your financial stability.

We’ll guide you through some steps on getting a mortgage with a new job, what may happen if you change jobs while buying a house, and how a job change can affect your chances of getting a mortgage.

How to get a mortgage with a new job

1. Shop around for lenders

Different lenders have different policies regarding borrowers with new jobs. Not only is it crucial to find a lender that’s willing to work with your employment situation, but it’s also necessary to compare rates, terms, and requirements to find the best fit for you. 

2. Improve your credit score

While your employment history is essential to the mortgage application process, lenders will also consider your credit score and credit history. Your credit score and history demonstrate your creditworthiness based on how you’ve managed your short-term and recurring debts.

3. Lower your debts

Lenders will also consider your debt-to-income ratio (DTI), which compares your current debt utilization to your income. Your DTI shows lenders how you’re managing your debts now, and how much more debt you can take on to ensure you’re not borrowering more than you can afford.

4. Build up your savings

While it’s not a requirement, lenders prefer to see that you have two to six months’ worth of savings in case of an emergency. Having substantial savings also demonstrates to a lender that you’re financially responsible. With more cash on hand, you may even be able to make a larger down payment, decreasing the amount you need to borrow and potentially lowering your monthly payments.

5. Gather documents to show a history of employment

When getting a mortgage with a new job, lenders will want to verify you have a stable income and employment history. This typically means reviewing documents like your most recent pay stubs and W2s. While there's an element of stability to being in your current job for at least two years, a job offer letter with a new employer (same industry or line of work) that can be verified will work when applying for a mortgage. College transcripts showing education leading up to a current job is also generally acceptable.

To verify your new employment or gaps in employment, a lender may ask you to provide one or more of the following documents:

• Employment contract(s)
• Job offer letter(s)
• Letter from employer to show proof of employment
• College transcript(s)
• Letter of explanation for employment gaps or job changes in a new industry

Typically when a new job is in a different industry from your previous one, lenders ask for a letter of explanation for the job change. This is usually a written statement to show how your new position relates to your previous work experience, education, or other forms of training. If you just started a new job, your lender may also expect you to submit your first pay stub as soon as you get it. If you’ve been at your new job for a while, they’ll likely require the most recent two or three pay stubs.

6. Consider co-buying 

If you’re fresh out of college or experienced a significant gap in your employment, having a co-signer or co-borrower with a longer, more stable, job history can help strengthen your application. Both are listed on the mortgage and responsible for ensuring payments are made on-time, but co-signers are not considered an owner of the property since they're not listed on the title.

Employment requirements for a mortgage

All mortgage loan programs require some degree of verification of current and past employment. Employment verification generally consists of showing proof of employment through documents, such as pay stubs and W2s. Sometimes employment verification is done electronically through a service, like True Work or the Work Number. Other times, it may require a written verification from the current employer.

Any significant gaps in employment history or frequent job changes may require a letter of explanation. For instance, say you have a two-year work history, and then took six months off after the birth of a child or to care for a sick family member. You then returned to the same or similar job. Your lender may ask for a lender of explanation to account for the six month gap.

Here are some of the different employment requirements for getting a mortgage by loan type.

Conventional loans

Conventional loans typically require borrowers to have two years of work history to show job stability. If you start a new job, lenders usually accept a job offer letter with a new employer (same industry or line of work) that can be used to verify your new employment, as well as a college transcript showing your education leading up to your current job.

FHA loans

Like conventional loans, FHA loans also usually require two years of work history. When starting a new job, you’ll need to show proof of employment. Lenders will also take into consideration time you spent on any education leading up to your current job and may request proof, such as program certifications or college transcripts.

VA loans

VA lenders consider your active military duty as employment. VA loans typically require you to have two years of schooling or military service as a form of work history. If starting a new job, you may be required to provide proof of continued employment from your current employer or proof of past training or relevant experience that qualifies you for your current position, such as references from former employers or training officers.

USDA loans

USDA loans have no minimum length of work history, but lenders typically require proof of job stability in your current role, like a letter from your current employer. Generally, you still need two years of previous work history, which can be verified with W2s, tax returns or a letter from a former employer. USDA loans also require that your annual income does not exceed 115% of the area’s median income. To verify this, your lender may ask to see banking statements and pay stubs.

What happens if you change jobs while buying a house?

Whether you’re in the middle of shopping for a home or already applying for a mortgage, changing jobs while buying a house can add complexity to the application process. If you find yourself changing jobs while buying a house, there may be a delay in the processing of your application, as your lender will need to verify the circumstances of your new employment.

Changing jobs after mortgage pre-approval

If you start a new job while buying a home, even if you have mortgage pre-approval, your lender may require an official employment letter detailing the following:

• Your new position
• Your qualifications for the position
• Your start date
• Your salary
• Any other relevant information pertaining to your position, future promotions, etc.

Changing jobs before closing on a house

If you change jobs while closing on a new home, it may delay the closing process. Your lender will want to verify that your new job is either a continuance or an improvement to your current stream of income, so they’ll likely require a Verification of Employment (VOE) in addition to a letter from your employer. A VOE is a request from a business, agency, or loan officer to verify information on a present and sometimes former employee. 

How does changing jobs affect getting a mortgage?

Any changes in your life that affect your income, assets or credit could add a delay and affect the documentation a lender will require for getting a mortgage. Changing jobs is one example. A job change that results in a promotion, higher pay in the same field or moving from part-time to full-time work can positively impact your mortgage application. However, if a job changes from salary to commission, results in a pay cut or you become self-employed, lenders may need additional documentation to reassess your loan qualifications. Lenders aim to minimize lending risk, so understanding how employment changes influence mortgage eligibility can help you address potential concerns before they arise. 

Our loan officers here at Zillow Home Loans* are always available to answer any questions you may have about financing. Reach out whenever you’re ready to begin shopping for a home.

*An equal housing lender. NMLS #10287