2 years work history and 6 month’s unemployment

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2 years work history and 6 month’s unemployment

Sara Habtom
New to Real Estate · Member since 2023 · 14 posts · 2 votes

Has anyone got approve by a lender without a 2 years work history and about 6 months of unemployment? If so, love to hear more about it! 

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  • Anne Lu
    Real Estate Agent · Denver, CO · Member since 2023 · 12 posts · 5 votes
    2y

    What was offered to me personally was a DSCR loan, since it's based on rental income of the property you're trying to get a loan on, not previous and current personal income.

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  • Sara Habtom
    OP
    New to Real Estate · Member since 2023 · 14 posts · 2 votes
    2y
    Quote from @Anne Lu:

    What was offered to me personally was a DSCR loan, since it's based on rental income of the property you're trying to get a loan on, not previous and current personal income.

    What are the requirements to be approved for a DSCR loan? 
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  • Kristen L GarnerBusiness Member
    Lender · Phoenix, AZ · Member since 2021 · 451 posts · 287 votes
    2y

    I agree with Anne on DSCR. DSCR stands for Debt Service Coverage Ratio and you qualify based on the property itself rather than your DTI, work history, etc. You typically need 20% for the down payment and there are some credit score requirements as well. DSCR only works for investment properties. If it is for an owner occupied purchase you could do a bank statement loan, profit and loss loan, or asset based loan. These owner occupied nonQM products usually require 10% down and have some credit score requirements as well.

    If you wish to stick with a conforming product, you may be able to.  If the 6 months of unemployment makes sense with your line of work.  Some lines of work are seasonal by nature - like snow removal jobs, entertainment industry, etc 

    [email protected]213-880-0434
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  • Austin ClarenceBusiness Member
    Lender · Phoenix, AZ · Member since 2023 · 136 posts · 32 votes
    2y

    Yes you do not need to have been working for 2 years. If you were in school this is part of your work history, if you took a leave of absence you can say that. If you have been working for 6 months and full time there will be loan options.

    IF its an investment purchase you can do DSCR where you solely need the rental income and no personal income

    [email protected]650-906-2376
    Austin Clarence with NEXA Mortgage552 Reviews
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  • Anne Lu
    Real Estate Agent · Denver, CO · Member since 2023 · 12 posts · 5 votes
    2y
    Quote from @Sara Habtom:
    Quote from @Anne Lu:

    What was offered to me personally was a DSCR loan, since it's based on rental income of the property you're trying to get a loan on, not previous and current personal income.

    What are the requirements to be approved for a DSCR loan? 

    The most important thing is having the appraiser (lender will contact) appraise your investment property with rents above the mortgage, so the lender knows you will be able to pay them back. Appraisers are typically pretty conservative and will use long-term rental rates, not mid/short term rates. So the steps I recommend to do this would be to talk to a few lenders first, get an idea of what their process is and see who you enjoy working with, look for your investment properties, and get back to the lenders so they can appraise and approve/disapprove the loan.

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  • Carrie Matuga
    Lender · Riverside, CA · Member since 2017 · 248 posts · 98 votes
    2y

    @Sara Habtom With a DSCR loan as long as you have credit over 660, it's the revenue that the property brings in that qualifies the loan. So if you don't have the work history, it's not an issue.

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