topic Re: Laid off...taking a commission based job...FHA question in Mortgage Loans

Laid off...taking a commission based job...FHA question

Anonymous — Fri, 01 May 2009 15:30:28 GMT

I was just laid of from my job as a sales assistant for a media company and the job Im going to take is commission only after 5 months. Is this going to hurt our chances for FHA? We are planning to apply in Aug/Sept and until this had all of our mortgage ducks in a row. Fiance credit & my credit have mids in the 660's + 5% down payment and he has a 5 year steady work history @ 55k/year. But from what I read on here commission must be averaged over a 2 year period. So if its only been 4 months does that mean they cant count my income?? Help!

Re: Laid off...taking a commission based job...FHA question

medicgrrl — Fri, 01 May 2009 16:03:59 GMT

No, they most likely won't count your income. You would need a history of commission with this company. Is there any sort of guaranteed income with this job if you don't meet your sales quota?

Re: Laid off...taking a commission based job...FHA question

Anonymous — Fri, 01 May 2009 18:31:47 GMT

Well thats almost as devestating as being laid off. Im in advertising and in the industry right now you either take a sales job or be on unemployment for 6 months so my choices are limited to say the least.

So Follow up question....what if he just applied on his own and we had a family member with exceptional credit that would be willing to co-sign? Is that even possible??

Re: Laid off...taking a commission based job...FHA question

medicgrrl — Fri, 01 May 2009 21:40:16 GMT

It is possible to have a co-signer. Just remember their debts will also be included in the qualifying DTI. Also, he will have to qualify somewhat on his own also. What sales price are you looking at? What are his debts only? Any debts that could possibly be refinanced into your name only? What is his income?

I know what you mean about unemployment. Right now you take what you can get.

Re: Laid off...taking a commission based job...FHA question

Anonymous — Fri, 01 May 2009 23:18:04 GMT

Well if they would agree to it, our co-signers would be my grandparents and they have credit scores around 800. My grandfather co-signed on a loan for me a few years back so I know they would be approved....dont know if they would do it for sure. We were looking at a sales price of 175-200k in Baltimore area, anything less than that and you would be living in a bad neighborhood. By himself he makes 55k/year which isnt enough to get approved for that price by himself. He doesnt have any debts, no school loans, no open car payments, one credit card which only has $10 left on it. We werent using or applying for any credit in the last year b/c we were saving for a house, there goes that idea. Thanks for the heads up though so we wouldnt be surprised when we were turned down

Re: Laid off...taking a commission based job...FHA question

Anonymous — Fri, 01 May 2009 23:30:13 GMT

@Anonymous wrote:
Well if they would agree to it, our co-signers would be my grandparents and they have credit scores around 800. My grandfather co-signed on a loan for me a few years back so I know they would be approved....dont know if they would do it for sure. We were looking at a sales price of 175-200k in Baltimore area, anything less than that and you would be living in a bad neighborhood. By himself he makes 55k/year which isnt enough to get approved for that price by himself. He doesnt have any debts, no school loans, no open car payments, one credit card which only has $10 left on it. We werent using or applying for any credit in the last year b/c we were saving for a house, there goes that idea. Thanks for the heads up though so we wouldnt be surprised when we were turned down

Well actually that depends on some things.

Do you know roughly what the taxes would be in your area? How much of a deposit do you have? Do you also have money for closing costs.

Based on $7000 cash deposit to bring to this (which would work for FHA) + you would need to have your closing costs on top of that and with an income of $55000 per year with no debts coming out of there - a conservative estimate is that you could borrow $175,000 (with an interest rate of 5.5%) for a monthly payment of $1283 in total

Re: Laid off...taking a commission based job...FHA question

Anonymous — Sat, 02 May 2009 14:50:00 GMT

@Anonymous wrote:
Based on $7000 cash deposit to bring to this (which would work for FHA) + you would need to have your closing costs on top of that and with an income of $55000 per year with no debts coming out of there - a conservative estimate is that you could borrow $175,000 (with an interest rate of 5.5%) for a monthly payment of $1283 in total.

Locally (Chattanooga, TN) I'm seeing FHA rates as low as 4.75. I wouldn't completely discount being able to qualify for that amount with his income alone. Looks to me like you're right on the cusp of being able to pull it off. Doesn't hurt to check and even if you're turned down, the inquiry will fall off before you'd be ready to apply again.

Re: Laid off...taking a commission based job...FHA question

Anonymous — Sat, 02 May 2009 17:18:49 GMT

Just an FYI: It is a criminal offense to have him apply on his own (you not co-signed) without disclosing the purpose or nature of loan to the lender. It is called mortgage fraud through a straw borrower. Essentially you are buying the house and borrowing the money through a non-resident intermediary, solely for the use of their credit. So, while he may be approved and you might get into the house this way, just be aware it is a federal felony.

In order to do FHA 3.5%, he will have to represent that he will occupy the home. Otherwise it is an investment property and won't qualify as outlined. This is a false representation, unless he is moving in with you.

Message Edited by txjohn on 05-02-2009 10:18 AM

Re: Laid off...taking a commission based job...FHA question

Anonymous — Sat, 02 May 2009 17:34:59 GMT

@Anonymous wrote:
Just an FYI: It is a criminal offense to have him apply on his own (you not co-signed) without disclosing the purpose or nature of loan to the lender. It is called mortgage fraud through a straw borrower. Essentially you are buying the house and borrowing the money through a non-resident intermediary, solely for the use of their credit. So, while he may be approved and you might get into the house this way, just be aware it is a federal felony.

In order to do FHA 3.5%, he will have to represent that he will occupy the home. Otherwise it is an investment property and won't qualify as outlined. This is a false representation, unless he is moving in with you.
Message Edited by txjohn on 05-02-2009 10:18 AM

Thanks for trying to give me a heads up. But clearly you didnt read the previous post. He's my fiance, we're getting married in Spring 2010, so its not a problem, we already live together we wanted to buy it togeher but with my job issues we may just have to scale down our expectations so he can get a loan just based on his income, or we'll just have to rent and save up more $$ for a bigger down payment

Re: Laid off...taking a commission based job...FHA question

Anonymous — Sat, 02 May 2009 17:52:52 GMT

I may have misunderstood the thread....I was getting the impression that you were having a grandfather potentially obtain the loan for you. When I said "him" I was giving you the FYI in case the idea came up to have Grandpa get the loan for you without cosigning, not the fiance. Sorry for the confusing use of pronouns and apologies if I didn't read the thread and follow up questions accurately.

Re: Laid off...taking a commission based job...FHA question

medicgrrl — Sat, 02 May 2009 22:51:29 GMT

She was talking about having her grandfather co-sign for qualifying purposes.

Re: Laid off...taking a commission based job...FHA question

Anonymous — Thu, 07 May 2009 01:26:26 GMT

its ok, thanks for the advice. After talking about it instead of throwing away more money on rent for another year we are going to scale down are expectations and try to get approved on his income & credit only. He meets all the criteria and we have the minimum 3.5% down already in the bank if we arent going over a price of 170,000. I guess we will find out in September!