Lenders know that the best assurance that you will make

  your mortgage payments is that you are stably employed

  and make enough money to cover all of your expenses.  If

  you can document those two important qualifications, you

  have gone a long way toward qualifying for a reasonably

  priced mortgage.  Without them, expect to pay higher

  interest rates to compensate for the greater risk the lenders

  are taking in borrowing to you.   

  Income: Lenders require that you have sufficient income to

  cover the repayment of the mortgage.  Before you can be

  approved, the stability of income and the probability of the

  continuance of your income must be verified by W-2s and

  through letters sent to current and past employers.

  Employment History: While W-2s can document how

  much you have made in the past, employment verification

  and underwriter common sense must verify that it will

  continue.  For most loans, lenders require written and verbal

  verification of employment. The employer is sent a

  document asking them to verify your work history and the

  likelihood of your continued employment.

  Lenders require verification that employment has been

  continuous and similar in type (e.g. sales, masonry, nursing,

  etc.) for the two years prior to your application.  Any gaps in

  employment history require a reasonable explanation from

  the borrower.  There are several exceptions to the 2-year

  rule, and so it is best to ask if you are close but not quite

  there.  A typical example is that allowances are made for

  seasonal employment, such as outdoor trades.  Additionally,

  coursework toward your profession (e.g. nursing school)

  can be counted towards the 2-year requirement if

  employment followed directly after completion.

  Employment Continuance: The underwriter also determines

  whether employment can be expected to continue through

  the first 3 years of the mortgage loan.  If the borrower

  intends to make any changes during this period, such as

  retire, the expected income must also be considered.