Over the past 10 years, people have been dealing with some unusually stressful employment situations. Companies start hiring, business slows down, people get laid off. They go to another company, begin working, business slows, they get laid off. I have seen people going through scenarios like this. Unfortunately, when it’s time to purchase a home, the underwriters want to see a steady 24 months history of employment. If you have worked at several places in the past 24 months. you will be at a disadvantage.
The one silver lining is this. If you stay in the same line of work over those 24 months, that will help. Having a college degree or education in that line of work also helps. Staying employed is the best way to be certain your employment history will pass the underwriting guidelines with the lender. If your credit is at least in the Good Range, and you show a history of paying your bills on time, not overusing credit and you have some history of savings, those are all mitigating circumstances which help your case for getting a home loan. We actually call those compensating factors.
There isn’t much you can do to control whether or not a company decides to down size, but what you can do is this. Before you accept a new job, do some homework. Find out as much as you can about the company, and if things look at all shakie, do your best to obtain a position at another company. If you get a job, and you like where you work, then try to stay as long as possible. Sometimes once you already have a job, offers with other companies will come at you. That is great, but if you ever want to purchase a home, try to make it a full year before you change jobs again.
If you get an offer that’s too good to pass up, then talk about it with your Loan person, and write a letter to the file explaining why you decided to leave one job for another. If you can also document a significant rise in come that will help.