How long do you need to work at the same company before you can qualify for a mortgage?

By Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience

Edited by Michael Jensen, Mortgage and Finance Guru

Updated October 20, 2020

You are typically required to have a two year continuous work history before you apply for a mortgage but it does not need to be with the same company. Please note that military service and full-time education such as attending college count as employment when you apply for a mortgage.

Gaps in your work history of up to six months -- such as if you lose your job and it takes some time to find a new one -- are usually permitted as long as you provide the lender a letter of explanation, you have a two year work history prior to the gap and you have been back to work for at least six months.

There are other factors to consider if you are thinking about changing jobs before you apply for a mortgage. First, if your new job has a probationary or trial period, you are usually required to wait until this period expires before you can qualify for a mortgage.

Review Employment History Required for a Mortgage

Second, if your type of employment or how you are compensated changes, this can also affect your ability to get approved for a mortgage or the length of the employment history your are required to demonstrate.

For example, if you go from being an employee that receives a W-2 to being a contract worker or self-employed and receiving a 1099, you may be required to show a two year work history of self-employment. In short, your employment history clock effectively starts over if you become self-employed.

If you are self-employed in a similar line of work and earn a similar level of income, only a one year self-employed job history may be required. Either way, you may be required to wait before you apply for a mortgage.

Additionally, if you go from being paid on an hourly or salary basis to being paid primarily through commissions or a bonus, your employment history re-starts. A two year work history is typically required for commission or bonus income to be factored into your mortgage application although lenders may allow an income history of only one year for applicants with steady employment, high credit scores and significant financial reserves.

Finally, if you go from being a full-time employee to working part-time, this change should not prevent you from applying for a mortgage but if your income decreases because you are working less, you may qualify for a smaller loan amount.

In closing, changing jobs should not prevent you from qualifying for a mortgage in most cases. If your employment classification, how you are paid or work schedule changes, however, then you may want to wait to change jobs until after your mortgage closes.

Because employment history requirements may vary by lender and mortgage program we recommend that you contact multiple lenders in the table below to confirm that guidelines that apply to you. You may be able to find a lender that applies more flexible employment requirements plus shopping lenders is the best way to save money on your mortgage.

Sources

"B3-3.1-01, General Income Information."  Selling Guide: Fannie Mae Single Family.  Fannie Mae, August 7 2019.  Web.