I Just Started a Job. Is It Too Soon to Apply for a Mortgage?

Most people can't afford to purchase a home outright. That's what mortgages are for. And there are different factors that mortgage lenders consider when evaluating home loan candidates.

One of the most important things a lender will look at is your credit score, as it speaks to how risky a borrower you are (or not). Your lender will also look at your debt-to-income ratio, which measures the amount of debt you're on the hook for relative to your earnings.

What's more, your mortgage lender will want to see what your actual earnings look like. If you're applying for a mortgage that results in $1,200 monthly payments, your lender will want reassurance that you're capable of making those payments based on your salary.

But simply having adequate earnings to cover your mortgage payments isn't enough. Mortgage lenders also want to see some form of income stability. So if you've recently started a new job, you may want to hold off on applying for a mortgage until you have more of an established history at your company. However, there may be exceptions to this rule.

Why mortgage lenders look for consistency

Mortgages, by nature, aren't short-term loans. Many people spend 30 years paying off their homes. 

Now, just because you're gainfully employed today doesn't guarantee that you'll manage to hold down a steady job five, 10, or 15 years from now. But mortgage lenders want to know that you at least have an established job history at the time you sign your loan. So if you're new to a job, you may have a hard time qualifying for a mortgage. 

Rocket Mortgage says that lenders generally like to see a two-year history in your current job position before agreeing to a loan. This gives them some confidence that your job is a keeper. So if you've only been at your job for two months, you may not get your application approved.

When you're okay to apply for a mortgage soon after starting a new job

If you're a recent college graduate who's been working for a few months at a software company, you may not be able to get a mortgage by virtue of your limited employment history. Similarly, if you spent several years working as an accountant and this is your first year working as an art shop assistant, a mortgage lender might hesitate to loan you money.

But if you recently started a new job in the field you've already been working in, you may have better results. It's very common to move from one company to another. If you spent four years working as an accountant at one firm and have recently switched to another, a lender may not be bothered by that, because you're basically doing the same job in a different environment. 

Similarly, if you recently started a new job within the same company you've worked at for years, it may not be a problem. This holds true even if your actual line of work is different -- such as, if you moved from the finance department to the marketing department. 

All told, mortgage lenders have one objective -- to get repaid on the loans they write. A new job might make it so your lender is worried it won't get its money. And so you shouldn't be shocked if your mortgage application is denied by virtue of you being new to the workforce or your particular field. 

You can try to sway a lender to work with you in that situation by making a larger down payment. But whether that does the trick will really depend on your specific situation.