Mortgage application for a W2 Hourly Employee (insurance, loan officer, approved)
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Recently I have been approved for a mortgage with conditions. One of the condition is to explain my employment situation, whether I am permanent or temporary. My employer gave them a reply saying that I am working with them as a "W2 Hourly Employee". I receive all benefits from them like insurance etc. but I am still an hourly employee. Should I be concerned?
Below is my scenario:
-Excellent credit score with 25% down payment
-Mortgage amount is 2.5 times my gross salary.
-Mortgage in North NJ
-Employed for last 7 years in the same field
-Changed Jobs from a Permanent to W2 Hourly 5 moths ago. No gaps in employment (can prove it will all pay stubs and tax returns).
If the current lender rejects my application will I have a chance with any other Lender. They have been delaying the decision for the last 3 weeks by asking for minor things but not clarifying whether my employment situation is okay for them to move forward or not. So I wanted to know if my employment situation is acceptable to get a mortgage with any other lender. Appreciate your replies.
If you are hourly, your income over the past two years will be averaged, unless, your current employer will guarantee your position is full time and you show a track record of working that many hours.
The problem occurs when your hourly, times the number of hours you say you work, don't add up to your W2 or paystub.
Thanks. My employer filled that i work 37+ hours on average in the employment form provided by mortgage company. Is this not considered Full time? I am assuming he included the federal holidays in the average hours per week. I do work overtime and average 45-47 hrs per week if it is a full week. Using 37 hr week my loan to income ratio is 2.5. Appreciate your replies.
Last edited by boozereddy; 11-25-2011 at 11:53 AM..
Recently I have been approved for a mortgage with conditions. One of the condition is to explain my employment situation, whether I am permanent or temporary. My employer gave them a reply saying that I am working with them as a "W2 Hourly Employee". I receive all benefits from them like insurance etc. but I am still an hourly employee. Should I be concerned?
Below is my scenario:
-Excellent credit score with 25% down payment
-Mortgage amount is 2.5 times my gross salary.
-Mortgage in North NJ
-Employed for last 7 years in the same field
-Changed Jobs from a Permanent to W2 Hourly 5 moths ago. No gaps in employment (can prove it will all pay stubs and tax returns).
If the current lender rejects my application will I have a chance with any other Lender. They have been delaying the decision for the last 3 weeks by asking for minor things but not clarifying whether my employment situation is okay for them to move forward or not. So I wanted to know if my employment situation is acceptable to get a mortgage with any other lender. Appreciate your replies.
You say you changed from 'permanent to W2 hourly'. Do you mean you used to be salary and now you are hourly, or did you go from an employee to a temp worker or contract worker? Is your current job through a temp agency?
If you are through a temp agency or on a contract basis (i.e. 1 year contract) you are going to have a problem qualifying with any secondary market lender. You need a 2 year history for that scenario kind of like being self employed.
You say you changed from 'permanent to W2 hourly'. Do you mean you used to be salary and now you are hourly, or did you go from an employee to a temp worker or contract worker? Is your current job through a temp agency?
I meant on salary to hourly. I am currently on W2 and receive all the benefits like insurance etc. Do you mean a staffing firm, yes I work for them at a clients place. This is very common in tech industry and I have been doing this for last 7 years (except for 1 year when i joined on salary basis).
If you are through a temp agency or on a contract basis (i.e. 1 year contract) you are going to have a problem qualifying with any secondary market lender. You need a 2 year history for that scenario kind of like being self employed. Below is my employment history:
Worked initially on salary for 4 yrs on W2 with a staffing company after my graduation
2 years on W2 hourly for a staffing company
1 year on salary for a finance company
0.5 months on W2 hourly for a staffing company
It sounds like your loan may be at a big box bank and the loan officer is not in the picture of packaging your loan for approval. Most of the big boxes are take that application and move on to the next. The smaller banks and the brokers tend to more of a craftsman when packaging the loan.
It comes down to are you guaranteed any number of hours a week? If you were my customer, in addition to the Verification of Employment, I would have obtained a letter from your employer elaborating on your hours, that you can expect to work a minimum of 37 (guaranteed is even stronger, even if it's prefaced with "at this time, we are guaranteeing") hours per week, and that you are, indeed, considered full-time. I would then request from you every paystub you had from the start of that job. Sometimes employers are reluctant to provide these letters, but I am always the one requesting the letter - I never let an employee be put in the position of asking for documentation needed for a loan. (Jeopardizing anyone's job is not something I would want happen and I always ask before I contact the employer and take the heat for the request). I also assure the employer that the letter will not be shared with the employee/applicant.
To answer your question, yes, it's more than possible you will get a loan. But you need to look where your loan is at. Is it with a production line or a craftsman?
It sounds like your loan may be at a big box bank and the loan officer is not in the picture of packaging your loan for approval. Most of the big boxes are take that application and move on to the next. The smaller banks and the brokers tend to more of a craftsman when packaging the loan.
It comes down to are you guaranteed any number of hours a week? If you were my customer, in addition to the Verification of Employment, I would have obtained a letter from your employer elaborating on your hours, that you can expect to work a minimum of 37 (guaranteed is even stronger, even if it's prefaced with "at this time, we are guaranteeing") hours per week, and that you are, indeed, considered full-time. I would then request from you every paystub you had from the start of that job. Sometimes employers are reluctant to provide these letters, but I am always the one requesting the letter - I never let an employee be put in the position of asking for documentation needed for a loan. (Jeopardizing anyone's job is not something I would want happen and I always ask before I contact the employer and take the heat for the request). I also assure the employer that the letter will not be shared with the employee/applicant.
To answer your question, yes, it's more than possible you will get a loan. But you need to look where your loan is at. Is it with a production line or a craftsman?
Thanks for your reply. You have given me some hope. I am going through a mortgage broker currently. But the lender is a big box bank. I currently feel the broker has very little say with the bank. They are reviewing 1 condition per week and asking the same trivial questions again. Ex. They asked us to remove furniture from contract initially, which we did. Now after 2 weeks they want an independent appraisal to prove that furniture has no value. The local appraisal company quoted $800 for this. Also my 60 day rate lock expires in 1 week. So I really don't know in what interest they are delaying this. I thought I will give them till Monday.if things don't work out I will be going with a small local lender directly.
My broker just informed me that the loan cleared underwriting. Things moved very fast after I informed them I will back out. Tomorrow they are calling my employer for verification of employment so that they can issue clear to close. Hopefully the don't go into details of contract vs permanent with them. Wish me good luck.
Last edited by boozereddy; 11-29-2011 at 04:44 PM..
Thank you all for your help. We just closed today.
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