A good lender is not going to merely check to see that a potential borrower is employed at the moment and leave it at that. A good lender will instead look at the entire income history of a borrower to see if there are any trends that would point to risk. One of the most common income issues is gaps in employment. If a borrower has a history of being unemployed for a few months every few years, that’s a huge red flag. If the borrower leaves jobs quickly without having another job prepared to enter soon afterward, it is likely that they will continue that trend after they sign the mortgage. That is a major risk for the lender. Another common issue is that the borrower has only been at his/ her current job for a year or two. Quality lenders like to see at least two years of straight employment at one institution . That makes the lender feel secure that the borrower has a job and won’t be leaving any time soon. However, lenders are not going to automatically refuse a loan if a borrower has a history of changing jobs every few years. A smart lender will look at the kinds of jobs the person has had. For example, if a loan applicant is a restaurant manager and has worked at five different restaurants in the past 10 years, that’s likely to be OK for the lender. The reason for this is that the jobs are all in one industry which shows that the borrower has an established career. If an applicant has had five jobs in 10 years, and each one is in a completely different industry, that will be a problem. That shows the applicant doesn’t have an established career and poses an income risk.
QUALITY OF INCOME
As you would expect, the number one quality lenders are looking
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