When applying for a mortgage, lenders review your income and employment history to confirm you’re financially stable and able to repay your loan.
But do you get approved for a mortgage if you’ve just started a new job?
What's in this article?
Qualifying for a mortgage with new employment is still possible, as long as you provide the right documentation to prove you’re a reliable borrower.
In this guide, we’ll explain why employment history matters to mortgage lenders and how you can strengthen your mortgage application for approval.
Why does employment history matter to mortgage lenders?
Mortgage approval boils down to a borrower’s ability to repay their mortgage loan.
Your employment history plays an important role in helping lenders evaluate whether you can make your monthly mortgage payments throughout the loan term.
Stable employment signals reliable income
A consistent employment record shows lenders that you will likely continue earning enough money to cover your monthly payments.
Steady, dependable employment and income make you a lower-risk borrower.
Lenders look for a 2-year work history
Most lenders prefer to see at least two years of continuous employment.
This doesn’t necessarily mean you’ve stayed with the same employer, but your history shows stability in the same (or similar) field or industry.
Job changes can raise questions but don’t always hurt you
A recent job change could throw up a red flag for a lender and signal that your income isn’t currently stable.
However, many borrowers can still qualify with the right documentation and a strong overall mortgage application.
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Can you qualify for a mortgage if you just started a new job?
The short answer is yes. You can absolutely qualify for a mortgage even if you’ve recently started a new job. However, your approval will depend on how your new job affects your financial stability.
The following factors can strengthen your chances of getting approved.
- You’re staying in the same industry or career field: Career consistency shows lenders that your income is based on experience and a proven track record in a specific industry. If your job change is a promotion or career advancement, this will add even more credibility to your application.
- You have a signed offer letter or employment contract: If you haven’t received your first paycheck yet, your lender may accept an official offer letter or employment contract that states your job title, salary, terms and conditions and the start date.
- Your income is salaried or guaranteed: Salaried positions are the easiest to document and are viewed as the most stable. Hourly, freelance or commission-based work will require additional documentation.
What types of new job income do lenders accept?
Lenders look closely at the type, stability and predictability of a borrower’s income to determine whether it qualifies.
Here’s how lenders evaluate different income types when you’re newly employed:
- Salaried income: Considered the most reliable and often accepted with an offer letter or contract
- Hourly income: Acceptable if hours are consistent and full-time, with verification from pay stubs or your employer
- Commission, bonuses or overtime: Typically require a 1-2 year history before they can be included as qualifying income
- Part-time or seasonal work: Must show a stable track record or recurring pattern
- Contract work and 1099 income: Two years of tax returns generally needed to verify these earnings
If your new job includes a probationary period, lenders may delay loan approval or require your first paycheck as proof that you’ve started and are getting paid.
What documents do lenders require when you’ve just started a job?
Lenders want to verify that your income is real, stable and likely to continue. Without much history at your new job, you will need to provide additional corroboration.
The following documents can help you verify your income and get approved:
- Offer letter or employment contract
- Recent pay stubs
- Written verification of employment (VOE)
- Past W-2s or tax returns
- Bank statements
- Proof of licensing or certifications
- Explanation letter
Gather your documents early and share them with your loan officer up front to prevent delays, especially if your new employment situation requires additional verification.
How can I boost my mortgage approval chances with a new job?
Starting a new job doesn’t mean you need to give up your dreams of homeownership.
If you work to strengthen other parts of your mortgage application, you can improve your overall chances of approval.
Keep your credit in good standing
Your credit score is one of the most important factors in mortgage approval.
Keep your score in good shape by:
- Making all your payments on time
- Avoiding opening new accounts
- Keeping balances low
A strong credit score can help offset the risks of recent job changes.
Lower your debt-to-income ratio (DTI)
Your DTI compares your monthly debt payments to your gross income. Most lenders prefer a DTI of 43% or less.
You can lower your DTI by paying down existing debts, such as credit cards, personal loans and auto loans, whenever possible.
Make a larger down payment
A large down payment lowers the amount you need to borrow, making you a lower risk for lenders.
Wait until you’ve received your first pay stub (if possible)
While many lenders will accept an offer letter, a recent pay stub proves that you’ve started the job and are being paid as expected.
This can streamline the underwriting process and reduce the need for additional verification.
Work with a Compass Mortgage loan officer as soon as possible
A knowledgeable loan officer can review your specific employment and income situation and help you navigate lender requirements.
They can also guide you toward loan products that are more flexible for newly employed borrowers.
Is it better to wait to buy a home after changing jobs?
If you’ve recently started a new job and aren’t under any particular time constraints, you may wonder whether buying a home is worth it now or if it’s smarter to wait.
Let’s run through your options.
Reasons to wait before buying a home
- You’ll have more income history.
- You’ll have smoother, faster underwriting with fewer constraints.
- You have more time to reduce debt, improve your credit score or save for a larger down payment.
Reasons to move forward with the mortgage process
- You’re earning more at your new job.
- Your employment is stable or in the same industry.
- Home prices or interest rates are rising.
There’s rarely a “perfect” time to buy a home; trying to time the real estate market can backfire.
Focus on whether buying now aligns with your financial goals and lifestyle.
Ready to buy with a new job? Talk to a mortgage expert today
The best way to make an informed decision is to speak with a mortgage professional who can review your situation and help determine whether you’re ready.
The loan experts at Compass Mortgage are here to help you with your questions and next steps.
A new job and a new mortgage represent a lot of change. Compass Mortgage’s Get Committed® program allows you to get a fully vetted loan commitment and lock in your interest rate even before making an offer. That’s one less thing to worry about during this exciting new chapter of your life.
Apply with Compass Mortgage or call us at (877) 635-9795 to speak with one of our knowledgeable and helpful loan officers.