How much more do newly listed homes cost?
Since 2020, home prices have risen by about 32.6% and counting. Busy metro areas have seen increases of as much as 43% or more! In April 2021, the average asking price for a new listing was $375,000, which is not for large properties.
In a competitive buyers market, you have to have an edge. Sometimes, that means being able to place an offer before everyone else.
If you’re getting ready to start the mortgage application process, then this article is for you! Is your profession going to stop you from getting a home loan? Read on to find out.
Do You Have a Steady Profession?
Do you have a steady profession? Perhaps you’re in a highly sought-after field, such as the medical or legal industry. When you specialize in an industry, you can usually qualify for exceptional loan opportunities. For instance, there are loans for medical professionals, such as doctors or nurses.
Is It Easier or Harder With Commission?
Do you have a position where you receive bonuses or commissions? Sometimes, getting approved for a loan can be tricky when you don’t have a steady income. However, that doesn’t mean it’s impossible!
If your job uses a commission-based pay structure, you’ll want to get a copy of how it operates. Present the commission structure to your lending officer, and provide proof of what you’ve earned.
Do you have a seasonal job? Perhaps you only work during the busy holidays. Don’t worry; seasonal employment is an acceptable form of income. However, the lender is going to want to see at least 2 years of consistent earning.
Tip Based Jobs
What about tip-based jobs? Unfortunately, a lot of tip income doesn’t get reported for tax purposes. That means when you go to apply for a loan; the lender won’t be able to see how much you’ve been able to earn.
For instance, bartenders, and waitresses, can deal with tip-based issues. The good news is that as long as you properly document your tipped income, you should be able to qualify.
What Mortgage Gives You More Freedom?
Moving on, let’s look at what type of mortgage will give you the most freedom! You’ll get to choose between a fixed-rate and adjustable-rate mortgage loan. On top of the rates operating differently, each loan also brings with it unique advantages.
What’s the advantage of getting a fixed-rate mortgage? Dependability. Instead of wondering what your interest rate will be, you’ll know.
A fixed-rate mortgage keeps the same interest rate throughout the entire life of the loan. This can be a tremendous advantage because you can make long-term financial plans.
What’s the advantage of getting an adjustable-rate mortgage? While there is some risk that your interest rate will go up, there’s also a chance that the interest rate will decrease.
However, not all adjustable-rate mortgages are the same. Before agreeing to one, you’ll need to find out how frequently your rate adjusts. Next, find out if there is a maximum cap for how high the interest rate can rise.
Are You Looking for a New Job?
Are you in the middle of looking for a new job? Switching positions doesn’t necessarily mean you won’t qualify for a mortgage loan. Instead, you’ll have to pay extra close attention to what lenders are looking for, so you can give them what they want.
What Lenders Request
What are lenders going to look at to qualify you for a mortgage? Typically, they’re going to want 2-year documentation of your work history. This includes recent pay stubs, w-2s, all your tax returns, and a few more things.
If you’re getting ready to switch jobs, the biggest thing to consider is your income. Will your new payment be more or less than you were previously making? Will you be making hourly or salary type pay?
Finally, are there any commission structures to consider? When you’re going from one job to a better high-paying job, there’s nothing to worry about. It’s only when you’re downgrading your income potential that you could wind up facing a long denial.
No 2-Year Job History?
Moving on, what about individuals who don’t have any 2-year job history? It can be tricky to get approval without a steady job history, but it’s not impossible.
For instance, you can apply for a mortgage when you’re just starting your career. Sometimes lenders will be able to approve you because of the type of profession you have. For instance, if you have a high-earning position such as a physician, it’ll probably be just fine.
Next, your employment doesn’t have to be conventional. A lot of lenders will consider all types of gig work, including self-employment income and contracting income.
What if you don’t have any job history or job? If you’re receiving unemployment income, it won’t help you get a mortgage. Even if you were just laid off, you’re probably going to have to wait to buy a house.
The only real exception to this rule is for individuals working seasonally. Seasonal workers typically experience long periods of unemployment, so they’re not penalized for loan applications.
Is a Mortgage Still Possible for You?
After reading this article, do you think you’ll qualify for a mortgage with your current profession? Remember, having unconventional employment doesn’t always mean trouble. Instead, loan approval is all about having the proper paperwork to document your income.
Start gathering your income documents now so that you can meet with a lender. You’ll need tax returns, as well as any recent pay stubs.
Finally, reach out to a reputable lender and start exploring your options! Are you ready for more tips and tricks? Then see what the rest of our site has to offer.