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Offer Letter Qualify Mortgage If Job Has Not Started?

Can you use an offer letter as proof of income to qualify for a mortgage if you have not started the job yet? I recently changed jobs to make more money but my new job does not begin for several months and I want to apply for a mortgage.

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

First off, for almost all borrowers it is highly recommended that you are currently employed when you apply for a mortgage.  Applicants with stable jobs and incomes are more likely to qualify for a loan.  Lenders verify your employment and income as part of your loan application to make sure you can afford your monthly payment and repay the loan.  If the lender determines that your job or monthly income are uncertain or likely to change then you may not qualify for the mortgage.  Additionally, if you are not working it can be challenging if not impossible to get approved, even if you have a job lined up in the near future.  We also recommend that you not change jobs during the course of the mortgage process if at all possible.  It is best to wait until your loan closes and funds before you switch employers or line of work.

To address your specific question if it is possible to use an offer letter to qualify for a mortgage, the answer depends on the applicant's specific circumstances.  Lender guidelines on this issue vary and depend on multiple factors including the applicant's job history, field of employment and type of income. For example, if the applicant is a salaried employee lenders are usually more willing to be flexible and use the offer letter as proof of income as compared to if the applicant's compensation is generated primarily from bonuses or commissions, in which case a longer track record of earnings is usually required.

If the applicant has an extensive job history in his or her line of work -- such as several years-- then the lender is also more willing to use the offer letter.  If the applicant has a limited overall employment history -- less than two years -- or is changing industries then the lender is unlikely to accept the offer letter as proof of income or employment and the applicant should wait until his or her job starts before applying for the mortgage.

Lenders also review the offer letter carefully to understand how certain the job is and if the employer has the ability to rescind the job offer.  A lender is unlikely to give an applicant credit for a future job that is easily cancelleble by the employer in the future.  Additionally, if the offer letter states that the job has a probationary or trial period then most lenders require that you wait until the job becomes permanent before you apply for a mortgage.

Because there is no definitive answer to your question, your best course of action is to contact multiple lenders to understand how they would handle your unique situation.  While most lenders require that you wait until your job actually starts before you apply for a loan, some lenders may be willing to work with an offer letter depending on the applicant's job history, line of work and type of income, the employer and the specific details of the offer.  We advise you to contact at least five lenders below as income and employment verification guidelines vary.

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Current Mortgage Rates as of May 20, 2019
  • Lender
  • APR
  • Loan Type
  • Rate
  • Payment
  • Fees
  • Contact
View All Lenders

%

Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. Click for more information on rates and product details.

About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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