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So me and my fiancee have near perfect credit. Hers is perfect, while mine is around 710 or so. We are both moving from Area X to Area Y, together. We've already signed a contract on a house in Area Y, because we were pre-approved on a mortgage. As we are moving, she resigned (in good terms) on her job from area X, today, but will be paid through the end of the summer. She will be looking for a job in Area Y. I am leaving my present job, and already have a new job in Area Y.

My lender I was dealing with said that he couldn't help us, as he had figured we would both be keeping our same jobs. I know that without her income, my own salary is not high enough (at the time, it's a step increase), to qualify. We do have a very large savings account, though, and are putting 20% down.

Is this "allowed"? Do mortgage companies automatically look at us and say, "No way?" We want to go conventional, as that is what the contract for the house, says. But, if we need to, we could change it to FHA.

We're scrambling right now, trying to find a new broker/lender, as we have 42 days to close.

chrisgummerson · Posted: Mon Jun 27, 2011 3:32 pm Post subject:

Rule of thumb when purchasing a home or a refinance. *Dont buy anything, *dont run your credit many times, *dont quit your job, *dont change your job to another line of work and *dont move money around or deposit "CASH"...If you are relocating, this is fine for a lender. Your problem is if you are not yet working. If you resigned and have not "hired on" then you would have to wait. A lender will want 30 days of paystubs from your new employer. If you stay in the same line of work, and you can show that you are working again, the lender should accept. If you change line of work, that usually is a problem, unless it was a lateral move to similar occupation or a job promotion to another dept...Contact your lender and see what the reason was they cannot help you. Dont lose hope, once you are working and can provide documentation, you will be able to get the financing.

gmakerley · Posted: Mon Jun 27, 2011 6:47 pm Post subject:

That's a whole handful of rules, Chris, and I agree thoroughly.

Anyone who leaves a job in the midst of qualifying for a mortgage to purchase a home puts the entire deal in jeopardy. Lenders are always going to consider current income as continuing unless advised by a borrower otherwise.

In this case, there's a possibility that a lender might give credence to an accepted offer letter for her job, particularly if it's in the same field as she's in (or was in) with a comparable pay scale.

Otherwise, as Chris noted, you'll just have to put your plans on hold until she's located another position that'll enable a lender to use her income to combine with yours for qualifying purposes.

Guest

That's what I figured would happen. Unfortunately, being a teaching spot, they really don't hire until a month or so after our closing date... and the schools procrastinate for quite a while.

The biggest thing to me, is we told the lender this prior to being pre-approved, and now, after it's come to fruition in contract form, we're being told no.

We'll try a couple things, but otherwise I think we're done.

I assume having a excessive large savings is essentially for not, as long as she doesn't have an income? We have the cash for 20% down, and then some.

gmakerley · Posted: Mon Jun 27, 2011 7:52 pm Post subject:

I took it for granted that the loan officer didn't know what was afoot - you didn't mention having informed him in your earlier post. That doesn't change the overall handling by the lender - their guidelines are pretty clear and any loan officer worth his salt ought to know that, frankly. He didn't do his job - you ought to have been apprised of the difficulty that would arise immediately.

It's unfortunate, obviously; if you can find a comparable home, or (perhaps) get an extension on the existing home from your seller - hopefully without penalty - then you could close as soon as you're able to document the added income from her new position.

The down payment is likely not to have any impact on your qualifying, though. Debt ratios are that important that only a substantial down payment would alter things, I'd have to surmise.

chrisgummerson · Posted: Tue Jun 28, 2011 8:11 am Post subject:

I think George made a great point. If you have the conditional loan approval from your lender, you need to satisfy those conditions to have the loan fund. I am guessing here but - one of the conditions on your approval was verification of your employment and 30 days of most recent paystubs. So if you can do as George said and get the seller to extend the contract, you should have a good shot. Unless your market is moving homes quickly, the seller will probably understand and wait. Talk with your agent about this. Also, look into a community bank or a portfolio lender such as ING, portfolio meaning that the bank holds their own loans, and does not sell them to others. You may find someone to help given your past job history and a letter from new employer specifying your job and income. Talk with a few more loan officers in your community and your agent about an extension.

gmakerley · Posted: Tue Jun 28, 2011 8:18 am Post subject:

I agree with Chris' suggestion that you shop around for a portfolio lender - credit unions will often grant such loans as well.

gmakerley · Posted: Tue Jun 28, 2011 8:19 am Post subject:

And another point comes to mind...you have little to lose if you seek out a new lender - a few dings on your credit report, perhaps; due to the inquiries, but those can all be overcome anyway.

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