Mortgage question - anyone know?

[lecach]

We're moving soon due to a new job for DH and my DH was talking to our financial advisor. He told him that we would NOT be able to get a homeloan if we're both not working. We both work full time now and I will be looking for a job after we move...hopefully not full time though.

The houses we're looking at are around $190,000. We'll have a "profit" from the sale of our house of around $40,000 that we can put on a new house. So we'd be borrowing around $150,000. And DH will be making $54,000 per year. Is he right that without two jobs we cant get a loan? I just have a hard time believing that.

 

[golfgal]

That is complete BS. We have never had both of us working when we have bought homes. Now, your DH's income would need to support a loan of that size and if it does, no problems.

 

[ilovejack02]

That is a question for a mortgage company.

It is your income to debt ratio and credit scores that are the issue not if you work . Bought our house three years ago. I haven't worked in 7 years.

AT 54,000 a year and with other debt, you might need both of you working , if there is no other debt, you should be in clear.

 

[ccgirl]

Keep in mind that mortgage companies have gotten a lot more strict with giving out mortgages now with all the foreclosures. I am a realtor and people that would have had no problem getting a loan 3 years ago are now getting denied. Try other mortgage companies though. They all have their own "rules". For a $150,000 mortgage, I am thinking you will need more than $54,000 in income though. You can also try the online calculators to get an idea of what you might qualify for. Just google mortgage calculators. Good luck.

 

[wildernesslodgelover]

I don't work. My DH makes 100k gross, we just bought a house for 350k, put 80k down, so we have a 270k mortgage. No debt at all except for one car payment (honda accord). Got a 4.5% interest rate.

Our purchase was a short sale...and we had a LOT of ups and downs...almost did not get the house a couple of times. Our mortgage borker has to go to different banks to finally make it happen.

Good luck!

 

[DizBelle]

Of course you can get a home loan with only one of you working. The question is, can you get approved for the $150,000 loan with only $54,000 of income. It has nothing to do with how many people are working. It has to do with the household income.

 

[dejr_8]

When I completed Grad school and moved to where I got a job my wife decided to take some time off work (she worked the entire time I was in grad school). After about 6 months off she went back to work.

When we applied for a mortgage about 6 months later we had to write a letter of explanation to the mortgage company about why she didn't work for those 6 months. I was making enough to qualify for the mortgage without her income.

 

[lecach]

We have no other debt. No credit card bills, no car loans, nothing. And our credit score is REALLY good.

I just did one of those calculators. It said that with our lack of bills, amount of down payment, DH's income, and our credit that we could qualify for a home that is $250,000. Now I know that is just an estimate but I would certainly think we could qualify for a loan of $150,000.

I wonder if the fact that I would be working right up until we move would factor in at all?

 

[emma'smom]

If you are moving, many mortage broker's use a formula for the "trailing spouse" income based on a percentage of your current annual salary. So, don't tell them you plan to change whether you work part/full time---just let them make the calculations based on what you are doing now.

Also, consider an FHA backed loan-- this may allow you to get a larger loan.

 

[ccgirl]

We have no other debt. No credit card bills, no car loans, nothing. And our credit score is REALLY good.

I just did one of those calculators. It said that with our lack of bills, amount of down payment, DH's income, and our credit that we could qualify for a home that is $250,000. Now I know that is just an estimate but I would certainly think we could qualify for a loan of $150,000.

I wonder if the fact that I would be working right up until we move would factor in at all?

I wouldn't think that would matter. Try another mortgage company and see what they say. Does that profit include paying realtor commission? Most banks like to have, although it is not probable a lot of times, a 20% downpayment these days. Obviously, you are very close to that threshold. I would shop around though. Good luck.

 

[BalooTheBear]

Deleted....

 

[Luvchefmic]

OP, didn't you just post that your husband just got this job? Did you sell your house that quickly? Or is this just speculation on selling your house? I only ask because maybe the mortgage advisor is looking at this as debt in addition to obtaining a new house loan...

Yes you read my mind...this would be an important detail to the scenario

 

[Carly_Roach]

We're moving soon due to a new job for DH and my DH was talking to our financial advisor. He told him that we would NOT be able to get a homeloan if we're both not working. We both work full time now and I will be looking for a job after we move...hopefully not full time though.

The houses we're looking at are around $190,000. We'll have a "profit" from the sale of our house of around $40,000 that we can put on a new house. So we'd be borrowing around $150,000. And DH will be making $54,000 per year. Is he right that without two jobs we cant get a loan? I just have a hard time believing that.

While I can't speak for the lending practices that created this housing crisis, I can tell you that the old rule of thumb was to never spend more than 2 to 2 & 1/2 times your annual income for housing. This means if your DH's annual income is $54,000 per year, then you shouldn't be looking at houses above $135,000.

Having said that, since you are putting down $40K you can up your target price to houses at $175,000 and lower and bring your total amount borrowed to $135,000. This would be 2 and 1/2 times your current income.

Your financial advisor is right: based on just your DH's salary and the fact that institutions are starting to go back to solid lending values, you will not be able to get a loan for $150,000 based on his income alone.

The idea about not telling them you plan to change whether you work part/full time-just let them make the calculations based on what you are doing now...IMO this attitude and tactic is reckless and unwise. It's precisely this kind of lying, omitting facts and justifying why you did it that got us as a country into this housing mess in the first place.

You're going to have to either lower your expectations when it comes to the kind of house you can afford on your DH's salary or go back to work yourself and count that income. Live within your means and you'll have a happier life.

 

[lecach]

I wouldn't think that would matter. Try another mortgage company and see what they say. Does that profit include paying realtor commission? Most banks like to have, although it is not probable a lot of times, a 20% downpayment these days. Obviously, you are very close to that threshold. I would shop around though. Good luck.

OP here.

DH did just get the job. He starts July 13 and DS and I will stay here til the house sells. DH will be living in a family lake house until we buy a new house in the new town.

As far as the advice we got - it was from our financial advisor with Edward Jones. NOT from a mortgage broker. He doesnt deal with loans at all, he just told my DH that we could have a problem so I am doing my research.

The houses in our floorplan have been selling for $255,000 plus we have a fence and a 4th bedroom which is rare in our neighborhood (and the others that have sold dont have either the 4th br OR a fence). So we should get at least that. We owe around $190.000 so we should clear at least $40,000 after fee's - but probably more.

Our house doesnt even list til next week. We're just doing a lot of "what ifs" right now.

Luckily my boss has worked out a plan that I can keep working as long as I want to/need to.

 

[Carly_Roach]

OP here.

DH did just get the job. He starts July 13 and DS and I will stay here til the house sells. DH will be living in a family lake house until we buy a new house in the new town.

As far as the advice we got - it was from our financial advisor with Edward Jones. NOT from a mortgage broker. He doesnt deal with loans at all, he just told my DH that we could have a problem so I am doing my research.

The houses in our floorplan have been selling for $255,000 plus we have a fence and a 4th bedroom which is rare in our neighborhood (and the others that have sold dont have either the 4th br OR a fence). So we should get at least that. We owe around $190.000 so we should clear at least $40,000 after fee's - but probably more.

Our house doesnt even list til next week. We're just doing a lot of "what ifs" right now.

Luckily my boss has worked out a plan that I can keep working as long as I want to/need to.

I'm glad to hear that you have a job for as long as you need it. That will help.

As far as what you think you'll get out of your house, it all depends on the market there in NC. These are the conditions here in Michigan:

I know someone who had a house that had an SEV of $234K that sold in May for $140K after being on the market for almost a year. They (the buyers of the $234K house) put their house, valued at $225K on the market for $165K in June and it sold in 12 days (they owned it and just wanted to get rid of it and pay for their new house).

But a neighbor of mine, whose house is valued at $119K put his house on the market in February for $125K. He's been dropping his price each month since then and it's now sitting at $112K and still there are no offers.

So what you think you'll get for your house and what you'll actually realize on the sale may be very different sums. Be prepared for that.

 

[barkley]

i think the more challenging thing with the mortgage application would be the new job status.

i say this b/c even when lending practices were looser it could be difficult to secure a new mortgage without at least 6 months at a new job. given the current econmony and how some job markets are still very unstable, lenders may be hesitant to extend a mortgage until a person has been with a new employer for a certain period of time.

 

[sunnyday123]

Keep in mind that mortgage companies have gotten a lot more strict with giving out mortgages now with all the foreclosures. I am a realtor and people that would have had no problem getting a loan 3 years ago are now getting denied. Try other mortgage companies though. They all have their own "rules". For a $150,000 mortgage, I am thinking you will need more than $54,000 in income though. You can also try the online calculators to get an idea of what you might qualify for. Just google mortgage calculators. Good luck.

Totally agree. It's very hard nowadays to get approved.

 

[J Le]

i think the more challenging thing with the mortgage application would be the new job status.

i say this b/c even when lending practices were looser it could be difficult to secure a new mortgage without at least 6 months at a new job. given the current econmony and how some job markets are still very unstable, lenders may be hesitant to extend a mortgage until a person has been with a new employer for a certain period of time.

This was certainly a factor in my recent mortgage process. Credit score and existing debt were also scrutinized, but the real difference between now and the process years ago was how carefully they check the down payment. I have to show the money trail from start to finish to prove the funds were not borrowed.

And of course you sign in blood now too.

 

[wdwfan16]

I would not be rushing into a new home just yet. Let DH work at the job for a while. See if it is what he wanted and expected. Sell your house and know how much you have left over. Put your stuff in storage and live at the lake house for a few month after your home sells. Get your new job and then look for a home.