In part one of this two-part blog series, we went over some of the basics on employment gaps and related issues that may crop up during a mortgage application. Income is a very important part of any such application to lenders, and red flags may appear if your recent employment or income history has any major concerns.
At Altius Mortgage and our partners at Mortgage Ogden, we’re happy to walk you through the application process for any of our home loans, including providing assistance to those who worry a recent employment issue will impact their application. In today’s part two of our series, we’ll go over a few of the additional steps you may need to take, either before or during your application period, to ensure there are no employment-related concerns with your mortgage application.
Proof of Payment
For most lenders, any issues with employment history are viewed in a practical sense. Lenders aren’t dinging applicants for job-related issues just for the sake of following the rules – they’re only doing so when the issues appear to have a real impact on whether the potential borrower can repay the loan properly.
For this reason, one method of clearing up employment issues on an application is to provide a lender with proof of payment of either rent or a previous mortgage you’re currently under. Even if you’re between jobs or recently had a gap period in your employment, showing that you’ve been meeting housing payments for a significant period of time will often reassure the lender that you can continue to do so moving forward. This is also a common outlet for those who are self-employed or work temporary or seasonal jobs.
Avoid Job Changes
Wherever possible, try to avoid a major job change ahead of applying for a mortgage. We recognize this isn’t always possible – if you must make such a change, such as if you’re relocating from one location to another, ask your employer for a role change letter (for a shift within a current company) or an offer letter (for a new company) that you can present to the lender to show proof of legitimate reasoning for your change.
Job Loss Type
If you recently lost a job and you’re worried it may impact your application, one important area is whether or not you were fired for cause. If you can prove that you were not, and that your job loss came for any other reason, you’ll be in a better position with lenders – being fired for cause is looked upon as something of an employment red flag in many cases.
For more on how to handle employment gaps or related issues on your mortgage application, or to learn about any of our mortgage loans, speak to the staff at Altius Mortgage today.