You Need a Job To Get a Mortgage

“You mean I need a job to get a mortgage?”

“Yes, in this case you do.”

“I’ve paid all my bills on time all these years and now you’re telling me I need a job to buy my first home?”

This was a recent conversation we had with a potential borrower. Unfortunately in this market and in this day most borrowers will need to have a stable income source to qualify for a mortgage. You can’t just state your income anymore and obtain 100% financing, regardless of your credit score. Below is a diagram we’ve used for many years to explain how a proper lending decision is made. My wife Aimee calls it the “Four Corners of Home Financing” and it shows you the four things we lenders look at when we make a loan decision.

Four Corners of a Mortgage

The four items need to be in a healthy balance to obtain the right kind of financing. Here is what the text says if you’re having a hard time reading:

The source of your income and your employment history

Credit Score
An outline of your credit history and resulting score (scores range from 350 to 850)

Your savings, any investments and retirement uses as a source for down payment, closing costs and reserves.

The type of home (condo, townhouse) and for the purpose (primary residence, second home or investment)

Hat/Tip: Aimee Ghimire

This site is for informational purposes only. It is not sponsored or in any way affiliated with the government. If you are in need of a mortgage loan, consult with a licensed mortgage professional. All fair housing and equal housing opportunity laws apply when applying for a mortgage or buying a home. Copyright 2012.