Lender following up on Employment Verification. HELP! (2015, agent, sales)
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I am looking to purchase a home in the Richmond, VA area this winter/spring. I went to undergrad there for 4.5 years. Immediately after moved to NYC to pursue my dreams in working at a large ad agency and now 3 years later I am ready to move back! I feel it just makes the most sense. I'm tired of spending so much money each month in rent. So, I've already began saving and currently have $6,250 in savings. My lease does not end here (in Harlem) until June 2015. My goal is to have $20,000 in savings by December 31, 2014 by saving $1,700/month beginning this month.
Now that we have the basics about finance, my question is in regards to employment background check. Here's the gist of my resume:
Mar 2012- Mar 2013: NYC Ad Agency #1 (Assistant Account Executive)
Mar 2013- June 2013: NYC Ad Agency #2 (Account Executive) - only 3 months I know. [womp womp]
July 2013- Present: NYC Ad Agency #3 (Account Executive)
Additionally, I've had 3+ marketing/advertising internships, so I have been in the advertising/marketing industry for over 3 years and have stayed within the Account Management function.
Here's my dilemma:
I was hoping to keep my current job/salary when applying for homes; however, I was told by an informative CDer that it's best if I start looking for a job in Richmond, VA now. Otherwise, I will have to prove that my NYC job is going to let me work remotely in Richmond, VA so I will maintain the same salary. It is such a bummer because I do not want to have to search for a job until after closing on the house, since I was also told that I should have the same job for ~2 years when applying. I have, however, been in the same industry, which I heard counts for something. I basically do not want the Lender to see me as a flake that job hops too frequently as I'm worried it will negatively affect my chances of home ownership. I'm hoping my upward mobility counts for something- especially if I get promoted to Senior Account Executive by January 2015 (which is the goal as I'm eligible after 18 months of employment, and thus far have earned all of my quarterly bonuses).
Does anyone have any advice or been in a situation where they currently live & work in State "A" but buying a home in State "B"? Did you get the job in State "B" before applying? How is this done? Also, I find it extremely awkward for them to call my employer and tell them I am buying a house in VA (since I was not looking to disclose this information until after closing and everything final). Maybe it's ignorance, but I thought my PayStubs could easily verify my employment/salary information. Not sure why they would need to reach out to my employer as well.
I just want to start lining my ducks in a row. I'm not ready to job hunt in RVA. I love my current company and it is giving me time to save up (plus allowing me to work side gigs on the weekends like Cater Waiter, Coat Check Attendant, etc). I cannot live in RVA right now, especially since my lease doesn't end until June 2015. I don't mind subleasing for a few months but certainly not a whole year. Any & all helpful advice welcome and do let me know if you need further information!
I was hoping to keep my current job/salary when applying for homes; however, I was told by an informative CDer that it's best if I start looking for a job in Richmond, VA now. Otherwise, I will have to prove that my NYC job is going to let me work remotely in Richmond, VA so I will maintain the same salary.
You already received the correct, and really the only response. Every lender has to call to verify employment. You might show them your paystubs, but what if you quit that day or the day before? Then you have no income coming in. Everything is based on debt to INCOME ratios. If you don't have a job where you're buying a house, you're a risk and they will not give you a loan.
Unless your employer can say you can work at your same job remotely, you must get a job where the house is. Otherwise, you could claim you're buying a vacation home. That would be a higher interest rate though.
If you purchasing a home in another state than where your job is, unless you have a letter from your employer stating your position is a remote one, most lenders would probably consider that a vacation home. Aside from stricter underwriting, you'd probably be asked to put down at least 25%. You're also not considering what happens if you close on the home but can't find a job in VA? Are you realistically going to make payments on a home in VA and continue to live and work in NYC; can you financially do that?
"Maybe it's ignorance, but I thought my PayStubs could easily verify my employment/salary information. Not sure why they would need to reach out to my employer as well." The reason you can't do is because of all the widespread fraud in the 2000s; paystubs can be easily forged and a lot of people did so.
Why are you in such a rush to buy? You may move to Richmond and hate it; what's wrong with moving down there and renting for a year? Financially, it makes way more sense at your age to continue saving $$$ for your eventual move and start contributing more to your retirement; sorry to get my old man voice on but purchasing at your age doesn't make much sense as it limits your mobility, which is what your 20s are all about.
New job in new location = Full Time W2 Base Salary only. Bonus only counted if employer says it is Guaranteed no matter what and will be received in future years at that level.
Buying a house now = must be 2nd home in new location, must qualify with present housing expense, likely NOT able to use FHA/VA/USDA financing, must be Conventional loan with Minimum 15% down payment. Rates aren't that much higher on 2nd homes.
You already received the correct, and really the only response. Every lender has to call to verify employment. You might show them your paystubs, but what if you quit that day or the day before? Then you have no income coming in. Everything is based on debt to INCOME ratios. If you don't have a job where you're buying a house, you're a risk and they will not give you a loan.
Unless your employer can say you can work at your same job remotely, you must get a job where the house is. Otherwise, you could claim you're buying a vacation home. That would be a higher interest rate though.
Thank you for your help! I had no idea about the 'vacation home.' Sounds like I definitely do not want to claim that if it is going to incur a higher interest rate.
If you purchasing a home in another state than where your job is, unless you have a letter from your employer stating your position is a remote one, most lenders would probably consider that a vacation home. Aside from stricter underwriting, you'd probably be asked to put down at least 25%. You're also not considering what happens if you close on the home but can't find a job in VA? Are you realistically going to make payments on a home in VA and continue to live and work in NYC; can you financially do that?
"Maybe it's ignorance, but I thought my PayStubs could easily verify my employment/salary information. Not sure why they would need to reach out to my employer as well." The reason you can't do is because of all the widespread fraud in the 2000s; paystubs can be easily forged and a lot of people did so.
Why are you in such a rush to buy? You may move to Richmond and hate it; what's wrong with moving down there and renting for a year? Financially, it makes way more sense at your age to continue saving $$$ for your eventual move and start contributing more to your retirement; sorry to get my old man voice on but purchasing at your age doesn't make much sense as it limits your mobility, which is what your 20s are all about.
Thanks berniekosar19! I completely get what you mean about making payments on a home in VA if I am unable to find a job there. Something I forgot to leave out is that I do plan on renting out one of the bedrooms to help bring some extra income. Although, I do not want to have to rely on that obviously, but just as an FYI, I do realize starting out it would be nice to have a buffer. Plus, since there is VCU and Univ. of Richmond, there's plenty of grad students, young professionals in the are that I can offer a room to.
I understand why you feel I am in a rush to buy, however, after calculating all of the rent I ever paid since moving out of freshman dorms at 19, I've paid over $50,000! That really makes me nauseous thinking about it. Rent to me, is such a waste of money. Obviously, I need a roof over my head so it's not a waste in that regard, but the fact that I will never see the money again or have anything to show for it sickens me. A lot of my friends in the same age group as me are also looking into/ or have purchased a home so I do not feel I am too young for this move. As for moving there and potentially hating it, no chance ! I lived there 4.5 years and know what to expect. Love the smaller city feel with outskirts and suburbs. All of my good friends are still there too. I definitely feel this is the right time for me. If I rent for a year there, that's what, another $10,000 gone? I can't even bear to think about it. I do, however, realize that I do need to wait until next spring/summer so I can ensure I have ALL funds needed to make this move and it will give me time to job hunt. I interned in RVA at several companies and keep in contact with former employers so I am really confident that I will be able to find another Account Mgmt position at an advertising agency. I just hope the salary is on par with what I am making now (or hopefully, if I get promoted, on par with what I will be making).
And don't worry about you sounding like an Old Man, my Dad was telling me the same thing, but now I think he understands why being a homeowner is important to me and he's on board (as long as I don't expect any financial help from him, lol which I don't).
New job in new location = Full Time W2 Base Salary only. Bonus only counted if employer says it is Guaranteed no matter what and will be received in future years at that level.
Buying a house now = must be 2nd home in new location, must qualify with present housing expense, likely NOT able to use FHA/VA/USDA financing, must be Conventional loan with Minimum 15% down payment. Rates aren't that much higher on 2nd homes.
Yikes! Didn't know about the bonus so thank you for that!
Since it is not my second home, it will not be doable. After everyone's helpful comments, I think I will still meet with the Real Estate agent (who's also a friend of a friend) this January just to discuss the neighborhoods I am interested in, and get a feel for what I can afford at that time. Again, the goal is $20k, but anything can happen between now and then so I think it's best to wait and see what I have saved at that time.
If I wait until next Spring/Summer to buy, it will give me 1 full year to get everything in order. I can spend time job hunting and hopefully interviewing. I am OK with waiting a year to get a job, I just hope that they don't penalize me for just landing a job right before I apply. I was really hoping to have my current job on the application (since it will be 2 year anniversary with them next summer).
Also, my parents live in Northern VA, so if my lease ends here in NYC (June 2015) and I still do not have a house, at least I can move in rent-free until I close on a property. At least that's the goal! I know I seem all over the place and I apologize. I am just trying to learn as much about the home buying process as possible and it seems as if I learn something new each day and there's another requirement or stipulation that I am hearing about. I want to be a home buying pro by this time next year.
I work remotely and had to get a letter fom my employer stating this to secure our loan.
Thank you for sharing! I am pretty good friends with the HR Manager, but I would never ask her to lie for me and say that I am going to be working remotely if I am not. Working remotely is a possibility since I work for a digital ad agency and all of our marketing initiatives are online. We have several members work remotely- one Account Manager in Boston, Sales Exec. in the south east, and Analytics team member works in the Midwest. I'm sure it wouldn't be a problem, but:
1) I do not want to be presumptuous and assume that they will allow me to work remotely
2) I feel as though I may get bored working remotely. I love having colleagues and thrive on social interactions. I guess I would still have my client calls but it's not the same on the phone as it is in person
If you do not mind me asking, did you ask your company if you could work remotely? Did they know you were leaving before hand? My supervisor is the sweetest, most understanding person so I am sure if I told her my situation she would be understanding of my situation and let me work remotely. Not to mention, she would not have to worry about transferring all 12 of my clients to another Account Manager which can be daunting, especially since I already built rapport with them and the current AMs have their own portfolio of clients to manage. They would likely have to hire a replacement (not to say I'm irreplaceable or anything...)
I definitely feel ya and understand how you can feel you're just throwing your $$$ away in rent. However, as someone who was in advertising in NYC before going into real estate, I just advocate making sure you have your career completely settled before making such a huge purchase. You may, like myself, be burned out by advertising by the time you hit 30ish and decide to go into another field entirely; as well, you may end up receiving opportunities in other cities and having an illiquid asset hanging over your head may limit you in terms of pursuing better and more lucrative career opportunities.
I will also that if I could go back in time and give just one piece of advice to my 20 year old self, it would be to contribute much more to my retirement. I can't even tell you, doing the math, how many thousands of dollars I've literally thrown away because I didn't come close to maxing out anything, retirement-wise. Your 20s is where you can really make hay with your contributions leading to huge future income and that should be a priority for you. Houses will always be there, and you may find once you have a significant other, your housing needs will change significantly. If you can do the house and also contribute heavily to retirement, then go for it.
Ok; old man voice over.
Now, in regards to your original question, you definitely should have a job lined up in VA before you purchase; will make financing easier. However, you might need to wait a bit after moving before purchasing; most lenders will want to see some stable work history right after a move.
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! I lived there 4.5 years and know what to expect. Love the smaller city feel with outskirts and suburbs. All of my good friends are still there too. I definitely feel this is the right time for me. If I rent for a year there, that's what, another $10,000 gone? I can't even bear to think about it. I do, however, realize that I do need to wait until next spring/summer so I can ensure I have ALL funds needed to make this move and it will give me time to job hunt. I interned in RVA at several companies and keep in contact with former employers so I am really confident that I will be able to find another Account Mgmt position at an advertising agency. I just hope the salary is on par with what I am making now (or hopefully, if I get promoted, on par with what I will be making).
