07-27-2012 06:03 PM
My husband and I are looking to purchase within the next nine months or so if feasible, and I am still trying to understand how to best position ourselves. One concern that I have, although not quite sure if there is anything that I can do about it, is with regard to our employment history. We both graduated from grad school in 2011. By the time that we are ready to buy, he will have been working probably around 6 months. I will have been working less than a year and a half -- at 2 different jobs, both in the legal field. The first job is a one-year clerkship and the second is a firm job. The salariesare vastly different, and I'm definitely relying on the firm salary to be able to afford a home in our city!
Question is, how will they consider our incomes? I would much rather them consider my W-2 from my newly-started job than my tax returns b/c that will have less than half a year at the higher salary. Is there any way to make that happen? Also, both husband and I have pretty high debt from grad school (although good credit scores). If we go in on the mortgage together, will they count his income AT ALL given that his experience at present job will be less than a year, or will they only consider his debt?
Is there any way that I can approach this that will allow my higher, recent (same-field) salary to be considered? Should we plan to include my husband at all given the limited work history and high loans? (Also, given that we are in a community property state is there even a choice, even if we do not do an FHA loan?) Using my new income , I should be able to afford a decent home on my own (at least that is what various online mortgage calculators say), and I would be willing to max out whatever loan is available given my DTI, knowing that we had his income as well to pay it off, even if its not included in the lender's calculations. Does that seem like the better strategy if he is only going to have 6 months or so of income to report (but a decent amt of loans)?
07-27-2012 06:38 PM
07-27-2012 06:44 PM
Very interesting....thanks for sharing your experience -- that is definitely different from the experiences I was getting from reading past threads. That would definitely be great if that ends up being the case for us. Did they ever use your prior year tax returns for any purpose?
07-28-2012 09:48 AM - last edited on 07-28-2012 11:13 AM by MarineVietVet
Lenders are typically looking for a 2 year job history, HOWEVER they will usually substitute the work history for being in school. Normally the only way 2 years would be required is if one of you were working part time. If you are both working full time, I would think you should be ok (as long as the numbers are good). The reason why I keep using words like "usually, should & normally" is because if I learned anything going through the home buying process, it is, no matter what the rule of thumb is, it all comes down to the lender & the underwriter.
They all have different rules & the underwriters all have different personalities. My husband works 1/2 the year but works 90 hours a week when he does work. Not one lender, excuse me, loan officer I talked to would count his over time pay as they could not wrap their heads around somebody actually working more than 40 hrs a week (gasp!) & it not being optional. Most of them told me he'd have to be there 2 years. Finally I found one that would count the hours, but not the wage. Right at the 2 year mark he went to a new employer (same field, same hours) & then we found our home, of course. Again, even though all the guidelines (FHA) say in the same INDUSTRY for 2 years, these loan officers would not even listen to what I had to say. Close minded & they know everything. I went back to the other lender & she didn't know how the underwriter would a) count his income & b) look at the recent job change.
We seriously applied for the loan before he even had a first paycheck stub. Well the underwriter has been the most competent person we have dealt with during the whole process (although I submitted a great package to them ). They approved the loan with virtually no conditions except for the obvious. But then to throw one more monkey wrench in our situation, my husband got laid off by the new company before we could get the final approval. He was laid off for a month & just started back at his old employer. My loan officer said we had to wait for 2 paychecks & we could try for the loan again (turning into like a 2 month time span). When I told her we might try another lender she asked if I could write a letter to the underwriter.
I did & within a few days the underwriter again approved the loan contingent on a paycheck stub to verify the income. The point of me telling you this is that you may get all types of different negative answers or even positive ones, but you don't know unless you try. I can't count how many loan officers acted like I was crazy, yet we've been approved by an underwriter 3 times (last year we almost purchased another home) with virtually no stipulations. We still have some behind the scenes things going on that I cannot breathe easy yet, but as for you, you won't know until you try!
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.