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This is a question about applying for a mortgage. My husband will be starting a job as a pharmacist in two months, making 130 thousand per year. He also has been in school for past decade so his income has been very low in past. My income has been steady at 120 thousand for two years. He also is currently working at the pharmacy at 15 dollars an hour for the next couple of months while he finishes up school at which point his salary will increase to 130 thousand. My question is this: If we apply for a mortgage now, what income will the bank consider? If we apply the first day he works (at 130 thousand), what income will the bank consider? When is the earliest possible time when the bank will consider both our incomes? He has an offer letter in hand and his job is really secure since pharamcists are always in demand. Thanks a bunch!!!
Technically the promise of employment (offer letter) is NOT THE SAME as actual income. Even after your husband makes the jump of 5x+ salary (great move on the education == better income front!!!) his credit scores are not going to reflect the new reality of being able to pay off student loans (if you have any) for quite a while. If you do not already know each of your credit report entries, it would be wise to get them.
Your debt-to-income ratio will probably support a much bigger loan than would be prudent to get as a 'starter', with out knowing how much saving you will have it is impossible to know what sort of down payment makes sense.
My FICO score is 754 and his is 763 as of last week. He has 125 thousand in student loans and I have none. We have 130 thousand in down payment and are very good savers. No credit card debt or auto loans. First time buyers since we rent apartment. We are looking to borrow max 375-380 thousand. I looked at mortgage calculators and my income alone will fall short of that amount although we could do it due to our savings habits.
What you are looking to use is called "projected income" and lenders have guidelines pertaining to that type. Conventional & FHA have slightly different guidelines.
For conventional typically the property you are buying must be a 1-unit (condo, SFR, etc.), it must be owner occupied (not a rental or 2nd home), typically projected income can't be used unless you are in the medical, legal, or educational field or are clergy, you must have a contract for the new employment, written acceptance of the employment, usually can't be more than 120 days from the time you are closing until the new income goes into effect, and you must have adequate cash reserves to pay the mortgage payments during the employment gap.
For FHA the use of projected income is allowed when you have received a non-revocable employment contract from a new employer, and work is to begin within 60 days of anticipated loan closing. You must have sufficient reserves to meet obligations during the 60 day or less time period. An example of allowable projected income would be a teacher who is under contract and moving during June or July, but will not begin work until August.
For conventional typically the property you are buying must be a 1-unit (condo, SFR, etc.), it must be owner occupied (not a rental or 2nd home), typically projected income can't be used unless you are in the medical, legal, or educational field or are clergy, you must have a contract for the new employment, written acceptance of the employment, usually can't be more than 120 days from the time you are closing until the new income goes into effect, and you must have adequate cash reserves to pay the mortgage payments during the employment gap.
Ok. By your comments we could get a mortgage tomorrow using both of our incomes. Thanks!!
Depending on what your debt payments are - you might be able to qualify for a $375-380k loan on your own income and wouldn't even have to deal with any of the projected income items. Of course it would probably give you greater peace of mind knowing that your husband has employment lined up, but I am just saying your income along usually qualifies for the loan amount unless there are excessive consumer debt obligations.
I have no debt of any kind and would be looking for a 30 year fixed mortgage. By this standard the mortgage calculators I look at on the internet allow me to borrow at most 360 thousand at 5.5%. So unless the mortgage companies are slightly more lenient than the calculators I come up short of 375 to 380 thousand on my own income of 120 thousand per year.
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