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Self-Employed, Considering Job Offer... Good/Bad Idea for FHA loan?

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Anonymous
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Self-Employed, Considering Job Offer... Good/Bad Idea for FHA loan?

I've spoken with several Loan Officers in my area now; none of them had clear answers.  I'd greatly appreciate any advice or experiences with qualifying in a similar situation.  I'll try to be as concise as possible:

 

  • Interested in a FHA mortgage on owner-occupied HUD house within 90 days.
  • Self-employed, 7 years.
  • Tax return AGIs are lower given all the deductions claimed.
  • Received a salaried job offer, same field of work, roughly double the previous income.
  • Credit ~680.
  • Substantial reserves.

 

Will changing jobs recently affect the likelihood of approval?

 

Does going from S.E. to W-2's after so long create any problems for income verification?

 

Is DTI based on the average income of the previous two years or is it now based on the current paychecks?

 

 

Thank you!

 

 

Message 1 of 5
4 REPLIES 4
Anonymous
Not applicable

Re: Self-Employed, Considering Job Offer... Good/Bad Idea for FHA loan?

I think that since it's in the same field of work, you'll be fine. I don't know about the other stuff. I'm sure the pros will be here shortly. =D

Message 2 of 5
StartingOver10
Moderator Emerita

Re: Self-Employed, Considering Job Offer... Good/Bad Idea for FHA loan?

It's a good move for you. The underwriter will need to see your pay stubs in the new job so that might explain the hesitation by the LO when you asked about the transition to w2 from self employed. The underwriter will use your current income to calculate DTI (from the new W2 job). Averaging is used for self employed or 1099, tip, bonus type income.

Message 3 of 5
Anonymous
Not applicable

Re: Self-Employed, Considering Job Offer... Good/Bad Idea for FHA loan?

Ditto above, should be okay since it is same field of work. You will likely need 30 days of paystubs before closing, but since same line of work it should be okay. If one lender doesn't, there will be one that will do the loan assuming you have substantial reserves in place and a larger than the 3.5% down payment standard with most FHA loans could be another compensating factor.

Message 4 of 5
Anonymous
Not applicable

Re: Self-Employed, Considering Job Offer... Good/Bad Idea for FHA loan?

Thank you for the input!  I'd been considering not filing as many exclusions on my '14 taxes to show the higher income, but I really dislike paying that self-employment tax...  

Message 5 of 5
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