New job, how long until we qualify for mortgage?

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Icon Mini Profile cap321

Joined: 21 Dec 2008

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Post Posted: Sun Dec 21, 2008 6:32 pm    Post subject: New job, how long until we qualify for mortgage?

My husband and I have good credit history and no debt, but due to a couple of international moves and my choice to stay home with our baby our work history looks somewhat spotty. We just returned to the US 6 months ago and he's been working as a temp for 3 months. He will be starting a permanent position in February and we were wondering how long we will have to wait until we might stand a reasonable chance of being approved for a mortgage. It would be a smaller mortgage (no more than $80k, or less than 3 times his salary).

How much would the size of downpayment (5% vs 10% vs 20%) make on the length of time he'd have to have with the job before we could get approved?

Thanks for your help.
Icon Mini Profile smithsussane

Joined: 18 Sep 2008

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Post Posted: Sun Dec 21, 2008 8:09 pm    Post subject:

Hi cap!

Welcome to forums!

As far as I know, lenders look out for 2 years of employment history while they are giving loans. So, I think, you will have to wait for some more time before applying for a loan. As far as down-payment is considered, it will be better if you can give a 20% down-payment. However, if you cannot, you can even give a 10% or a 5% down-payment but you will also have to go for a PMI (Private Mortgage Insurance). It is an insurance provided by by insurers to protects a lender against loss if the borrower defaults.

Feel free to ask if you have further queries.

Icon Mini Profile cap321

Joined: 21 Dec 2008

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Post Posted: Mon Dec 22, 2008 8:41 am    Post subject:

Thanks for the quick reply. I figured they wanted to see a couple of years of work history, but it's not that he's been unemployed for the previous two years. He has a 3 month gap in employment, while he was looking for work after we returned to the US. The two years prior to that he was employed in the UK. Do you have any idea how (or if) foreign employment factors into the mortgage approval process?
Icon Mini Profile gmakerley
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Post Posted: Mon Dec 22, 2008 8:56 am    Post subject:

cap321, i think you need to be encouraged. i think you and i are in agreement in considering the employment gap to be less important than it might be ordinarily. your husband's employment history in the UK would definitely be considered by most lenders - of course, verification would be necessary.

it would seem that the lack of work did not negatively impact your credit standing, so that would be in your favor.

with some lenders the amount of down payment won't drastically affect how your request is treated, but i will also suggest that the larger the better is often a good way to look at it. honestly, getting mortgage insurance has become much harder these days, so i'd suggest you have at least 10% for down payment. without doubt, you'll avoid some costs if you have 20%.

as for the loan amount, the calculation you cited (less than 3Xsalary) isn't going to be critical, but the overall ratio of debt to gross income will be. what you're going to need to determine is the monthly total of "piti" (principal, interest, taxes, insurance) for the particular property you choose. in addition to that amount, you'll need to add in for mortgage insurance (either pmi or fha, if you choose that route).

begin your shopping is my opinion. you may find some lenders reluctant, but you may also be successful in your search. it's worth the effort in any event.

George M. Akerley
Mortgage Consultant
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