Recent Grad getting a mortgage No W2 :(

adamcc91 · ‎10-04-2014

Hey guys, I've always been listed as a dependant under my father, we own a couple businesses and I've always worked for him, and yes, it was cash. It was a great idea in the beginning, but now I can see where it can bite me in the ass. Anyways, I've graduated and I am now working for our company, on the books. I gross about 55k a year (only been working since may when I graduated) I am engaged to a wonderful girl who also just graduated and also makes about 60k, she has work history, but I don't. I also don't have w2 forms because I've never technically had an income.

Well now we want to buy a house, I can show recent pay stubs, and we both have pretty good credit. I was just wondering what are the chances the bank would help me out or approve me when I have such a short work history with no w2. Also, the fiance has about 30k in student loans, I don't have any.

Also, since may we have chewed about 20k off of her student loans (she was around 50k) Should we keep throwing disposable income at that, or work on building up a larger down payment, I was kind of thinking FHA route for the lower downpayment

One last thing, we both are working in our degree fields.

please give me some ideas and or advice, thanks!!

sports1965 · ‎10-05-2014

I am no expert but u need to be able to prove your income .they are going to ask for your W2's

And you need to prove 2 years worth of employment history

ezdriver · ‎10-05-2014

Your income on which you have paid no taxes will not be acceptable to any mortgage lender. You have just stated in a public forum that you have been breaking the law. I suggest that you either go back and file tax returns for the years in which you paid no income taxes or wait until you have at least two years of tax returns to show the underwriter. Alternatively, your significant other can apply for the mortgage on her own.

adamcc91 · ‎10-05-2014

I know I screwed up, it wasnt anything major, just a little spending money. Couldn't have been more than 5k a year because I was still living under his roof. But now I'm working full time since I graduated, I'm paying tax on all of my income. I'll get my W2 in January, do you think that will be enough to qualify for a loan? We are looking in the 250k range

StartingOver10 · ‎10-05-2014

@adamcc91 wrote:
I know I screwed up, itwasnt anything major, just a little spending money. Couldn't have been more than5k a year because I was still living under his roof. But now I'm working full time since I graduated, I'm paying tax on all of my income. I'll get myW2 in January, do you think that will be enough to qualify for a loan? We are looking in the250k range

It is possible your wife can qualify on her own for that amount.

You may be able to obtain a mortgage because you now have verifiable income and you just graduated and you are working in your field.

It probably would be a good idea to straighten out your past tax issues (non-filing) before something pops up down the road.

adamcc91 · ‎10-05-2014

You guys are the experts, I guess I just couldn't imagine her getting approved for 250k when she makes 60k and has 30k in student loan debt

ezdriver · ‎10-05-2014

@adamcc91 wrote:
You guys are the experts, I guess I just couldn't imagine her getting approved for 250k when she makes 60k and has 30k in student loan debt

Approval depends on several factors and income is just one of them. One could have much higher income than that and not qualify if a lot of the income is already being used to service existing debt. Your combined, detailed financial picture needs to be evaluated by a loan officer in order for you to have a solid recommendation on which you can move forward. Even the question of your short employment could be accomodate by some lenders ... especially the portfolio lenders [eg: you local bank or credit union] as they would also be interested in future banking relationship with a young couple earning close to $100k from the getgo.

adamcc91 · ‎10-05-2014

Thanks for the help! Do you think we should keep throwing our disposable income at her loans, or should we save up for a down payment? Like I said before, I'm thinking FHA with the 3.5% But what would you recommend?

Anonymous · ‎10-06-2014

If your scores are over 680 then I'd be looking at 5% or 10% down Conventional loans. If you have good scores and can save the 5% down conventional would be far cheaper especially if your scores are over 700. Being a recent Grad and working in your field won't be a problem for a lot of lenders. However it almost assures a manual underwrite IMO. So you may want to address your previous financial situation.

Save the downpayment.

As far as paying down the student loans. If the payments are low and manageable I'd just keep paying them as is. If you feel that they are a burden or will be a burden once your expenses increase then pay them off. I for one regret paying all my student loans off less than 3 years after college. If I had just paid them for the 10 years my AAoA would be 10+ years at 30 years old. I had 5 loans that were actually 14 different tradelines due to transfers.

adamcc91 · ‎10-06-2014

I think I'm around 650, she is 720+ for credit scores. I'm sorry, but what do you mean by AAoA? I know there are tax advantages, but they would be far less than what interest would cost on the loans. I believe the most you can deduct is $2500? I could be wrong. However, if it is only $2500, we will pay that in less than a month. We have been paying about 3500-4000 every month on the student loans.