Your ability to score a mortgage, even a USDA mortgage, depends on many factors including your credit and debt ratio. But beyond those numbers, lenders often have to look at things like your job history too. What they want to see is that you are a stable and reliable employee. They don’t want to give a loan to someone that changes jobs frequently or worse yet, has gaps in their employment often.
So what does the USDA require for a job history? Keep reading to find out more.
The Required Length of Employment
The 2-year employment requirement that you’ve probably heard of before is a myth. While it’s true that the USDA wants to see a stable employment history, they don’t state just how long you have to be employed. What they want to know is that you are a stable and reliable borrower.
The lender’s job is to make sure that your employment is secure and that you have what it takes to succeed at the position. Just how long you have to be at the same job will vary by lender and individual. While most lenders won’t give you a loan after you’ve been on the job for a few days, many will give you a loan with a job history that is less than the standard 2-year requirement.
It’s All About the Evidence
If there’s one thing that any loan program has in common with another, it’s the need for evidence. Lenders need you to document everything and that includes your job history. Let’s say you started a new job a few months ago. On the surface, a lender might back off and avoid giving you a loan because there isn’t enough evidence to show that you’ll succeed at the job.
Now, let’s say that you recently completed a training program that prepared you for this job. If you have documentation showing that you completed this training and you can show how it pertains to the job, the lender might sing a different tune. They will see that you did what is necessary to succeed at the job.
The same is true for those that have a gap in employment. Let’s say you stopped working to have children. You have since gone back to the workforce, but only have twelve months of experience behind you. Again, with the right evidence to show why you were off work for so long, you may find a lender that is willing to give you a USDA loan.
The Other Factors Matter Too
It’s important to understand that lenders look at the big picture. They don’t overanalyze one aspect of your loan application and automatically deny you the loan. Instead, they look at everything to see how it all fits together.
For example, a borrower with a high credit score, but also a high debt ratio may look like a high-risk borrower if the lender looks at the debt ratio alone. If the lender looks at the credit score alongside it and then sees that the borrower has a lengthy and reliable job history, there may not be a problem in giving the borrower the loan.
The best thing that you can do to get your USDA loan approved is to make sure that you have a well-rounded application. Let lenders see that you have decent credit, a decent debt ratio, and reliable job history. If you changed jobs recently, don’t think you will automatically get denied. Instead, look at the big picture and see what level of risk you show to a lender. You might be surprised to learn that you still qualify.