What Is a Job Gap? What I'm Seeing In The Mortgage Lender Industry When Choosing an Originator 🏠

What Is a Job Gap? What I'm Seeing In The Mortgage Lender Industry When Choosing an Originator 🏠

So we're wrapping up the end of my notes for the week and I actually have two and I don't know which way to go I have three job gaps Adulting and evil property management. I know they all sound kind of interesting. I'm I'm gonna go with job gaps. So if you guys really wanted one of these other ones let me know I'm sure i'll do it another week. So job gaps is something we have a lot of questions about so This is going to be a video that's a little bit in the weeds I know that some of you guys really like it when I get all underwriting on you I'm, not a licensed underwriter.

I just talk to them a lot all day long so job gaps What is a job gap a job gap is a time period between one shop and another So for instance when I worked at a different lender before I came to guarantee rate 327 years ago there was a job gap of a week one week I took one week off. I was like I need a break Um, but sometimes what we'll see is we'll see job gaps that are six months job gaps that are a year a job gap That's two years.

So i'm going to talk to you about stuff that i've seen in the last few weeks that's acceptable and unacceptable so um something that we see Kobe kind of changed this a little bit just because traveling is a lot less desirable right now But i'm assuming that as soon as as soon as cove is over people go back to traveling And there is a whole generation of people now that's like okay i'm going to work for five years then i'm going to travel for Two then i'm going to go back to work and i've had a couple of these recently where they're like well Yeah I wasn't working for the last two years because I was traveling to costa rica with my family And then we traveled to europe and i'm like oh my god, that sounds so amazing.

I can't get you alone And they're like well, but I i'm gonna get a job Cool get a job Call me after you've been at that job for at least six months At least six months and if it's something where the job has variable pay two years if it's something where the jobs commission two years Okay, if you have a big job gap because you went to go explore the world like that's awesome I think it's great that you're doing that.

I'm very envious However, it doesn't show an underwriter stability. They can't go. Oh, well, he had a super good job before he left for two years He'll totally get another one No, we can't do that. We have to be able to show ability to repay and stability. So if you're in a situation Even if you have a job offer letter, if you're like wait, I was gone for two years But I got my job offer letter six months Six months and look you might talk to a lender that says different i've had multiple conversations with people No one has called me back and said oh another lender will do it You won't you're the worst and I would totally get that call people would call me and say that for sure so Um, you really want to make sure you're mindful that if you do take off these huge chunks of time that you're just realistic about the fact of okay Yeah Like when I get back i'm gonna have to like get a job work at it for a while and then buy a house It's not I had a great job bailed for two years to go traveling now.

Costa Rica

I want a million dollar house. No Doesn't work doesn't work right now guys. Okay, so let's talk about other types of job gaps So sometimes we'll see like maybe someone got laid off because of covid and they were out of work for three months With something like that that's covent related if they're in a new job that has a salary Or is guaranteed 40 hours and their pay stubs are matching. Usually I can get it approved with one month okay, so just know that like Underwriters and lenders we want to do loans we want to do what's best for you Like I only get paid when I click I close loans. I Don't get paid for anything else Like if i'm on the phone for 32 hours with someone I don't get paid for that unless that loan closes I want your loan to close but at the same point they have to be mindful of the guidelines and ability to repay So whenever a lender can make income make sense Of course we do, but we have to be able to back it up to the end investor.

So Short term gaps. Not a problem. We always want a letter of explanation And it's not so that they're judging you. They just have to be able to explain Why you were off for three months and maybe it's something where like, hey, my boss was super abusive All they did was stress me out and put more pressure on me So I had to quit I found a great new job. I really like it here. Cool one month One month, okay Now you could be in a position where you're transitioning jobs and you're not necessarily going to have a gap And you have a job offer letter in a circumstance like that where there's not going to be a big gap We can use the job offer letter provided.

It's non-contingent Also contingent on what on what program that you are looking at for your mortgage So there's lots of different ways to look at this Um, and I just want to bring up one thing because this comes up a lot So sometimes what we'll see especially with va and I guess I should probably talk about this on va wednesday But every day's va right now Um is if someone's in the military and then they go and they get they utilize the gi bill Even though they're in school for those years. It's treated a little bit differently so if they've been back at work for a month or a few months and they we can tie it together with their um, Their prior like what they did in the military Like maybe they were maintenance and then they went to school and now they're like running a maintenance department We don't have to wait the full six months. So there are some exceptions to these rules. If you know you have someone who Let's say that you were a you went to school to be a dental hygienist and then it took a couple months to get hired And as long as you're guaranteed 40 hours, that could be quicker than six months as well So there are some exceptions to that where I see the biggest issues is really long job gaps That's where i'm really seeing underwriters say you've got to be back for at least six months And then if it's commission or you need to use bonus or overtime? Two years guys two years if you had a big job gap, we're gonna need those two years So I hope this has been helpful.

Thank you for watching licensed in 44 states. Have a great weekend.

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