Three Common Myths About Employment History and Income Stability When Applying for a Home Loan in Utah

Here’s a truth that might surprise you: job-hopping or self-employment doesn’t have to crush your dreams of homeownership.

When it comes to applying for a home loan here in Utah, there are a lot of misconceptions floating around. Today, I want to debunk three prevalent myths that revolve around employment history and income stability. These myths can hinder your chances of securing a home loan, but fear not—I’ll shed light on the actual facts so you can navigate the mortgage process with confidence. Let’s dive in!

Utah Home Loan Myth #1: You need to have a long employment history to qualify for a mortgage.

Picture this: You’ve recently landed a dream job that pays well and offers excellent career prospects. However, you’ve only been with the company for a short period of time, and you’re worried that your limited employment history will hurt your chances of getting approved for a mortgage. Well, here’s the truth: While it’s true that lenders consider employment stability, the length of your employment history isn’t the be-all and end-all.

Take Jane, for example. She switched careers a year ago and started working in a new field when she moved to Millcreek. Although her previous employment history was unrelated to her current job, she’s been making steady income and has proven herself as a valuable asset to her new company. When she applied for a mortgage, she provided strong references from her current employer, demonstrating her capabilities and commitment. 

The key takeaway here is that lenders prioritize income stability and job security over the length of your work history.

Utah Home Loan Myth #2: Self-employed individuals cannot qualify for a mortgage due to unstable income.

Many believe that being self-employed automatically disqualifies you from obtaining a mortgage. Well, let me tell you—this is a myth that needs debunking. Being your own boss doesn’t mean you can’t achieve your homeownership goals. While self-employed individuals do face additional documentation requirements, lenders have specific guidelines to assess income stability in such cases.

Consider Marcus, a freelance graphic designer in Salt Lake City. He wanted to buy a home in Sandy but was worried about his variable income. However, he gathered his tax returns for the past two years, which showed consistent earnings and steady business growth. Additionally, he prepared financial statements showcasing his business’s stability and future projections. By providing this comprehensive financial documentation, Marcus demonstrated to the lender that his income was reliable, even though it may fluctuate from month to month. 

So, if you’re self-employed, don’t let the myth hold you back—properly prepare your financial records to strengthen your mortgage application.

Utah Home Loan Myth #3: Changing jobs before applying for a mortgage will automatically disqualify you.

Life is unpredictable, and sometimes changing jobs becomes necessary for personal or professional growth. However, the myth that changing jobs before applying for a mortgage is always a red flag needs to be busted. While job stability is a factor lenders consider, they also look at the bigger picture—your overall financial profile.

Let’s meet Alex, who recently switched from one company to another for a better opportunity in Murray. Initially, Alex was worried that changing jobs might hurt his chances of getting approved for a mortgage. However, he took the time to explain the reasons behind his career move in his loan application. He highlighted the increased income, improved job satisfaction, and long-term growth potential of his new position. By presenting a compelling case and emphasizing the positive aspects of his career transition, Alex reassured the lender of his financial stability and commitment to his new role.

Remember, lenders understand that career changes happen. What matters most is your ability to showcase a stable income and a promising.

Contact our team today to learn more about your Utah home loan options: 

GreenStreet Mortgage
(801) 900-6416
4001 S 700 E Suite 500
Millcreek, UT 84107