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So, I am in a total pickle - I am applying for a 30-year conventional mortgage with 20% down. The lender ran everything, and I am approved except for one issue:
I work on a rotating basis, 4/5 months on and 3/4 months off.
3 lenders I have talked to cannot get me approved because at the time the mortgage is set to close, I need to be currently employed. (I am in my "off" rotation, even though I have my next work contract, which starts in April.)
My closing date is March 15th.
The only other 2 options I was given are as follows:
As non owner (investment property), with 20% down, rate is 4.625% on 30yr fixed = principle/interest payment of $859
FHA loan with 5% down would be a rate of 3.875% for 30yr fixed = Priniciple/interest + Mortgage insurance = payment of $ 1123
If you go FHA – you can put any amount down, provided you put down at least 3.5%. I am using 5% down as a figure for illustration purposes.
MY QUESTION IS THIS:
Could I get approved under one of these two options if there is no pre payment penalties, then say - 6 months or so down the line when I am actually "employed" and working at that moment - refinance to the conventional 30-year at a better rate?
I was just thinking, this is just like the other guy's situation, but now I see its the same guy! I'm a real estate broker, not a loan officer or mortgage broker, so I can't say I'm an expert on this stuff, but I'd recommend that you continue to shop around on this. The three lenders you talked to, how many loan sources did they have? If they worked for one company, like a loan officer at a specific bank, you should definitely keep looking. Yes, lending of all sorts (but especially home mortgages) has tightened up a lot in the last few years, since when they were just basically handing out loans to anyone, but they are still lending out there, its mainly the people with marginal credit, little down payment, etc. who aren't getting loans now. Since you (from your other thread) have great credit and several years of verifiable income, I'd think that there are lenders out there that can deal with your job situation. Some lenders prefer people that get a regular paycheck every week while others don't mind someone who for instance, is self-employed, assuming they have something to back up that they have a regular income stream, usually their tax returns.
The one question I'm not sure about that I know lenders also place emphasis on is your debt/income ratio, I think you said you only have student loans to pay otherwise, but I don't know exactly how much a lender usually wants you to earn to qualify for a loan in the 200K range. Again, all good questions for a mortgage broker, I'd shop around some more if I were you!
I didn't want to post this in my other thread, since this kind of veered off topic
As a first time home buyer, I'm green to a lot of this, so I didn't know if I select (in my mind) a lesser option to get approved for a mortgage, how fast could I refinance once I'm at my job to get the lower rate.
...work on a rotating basis, 4/5 months on and 3/4 months off.
AbsolutKaz - strong word of advice, do not be pushed around.........
You don't mention your credit score? The higher your credit score, the more it is allows you better options... You putting 20% down is good, but it is the income reporting that underwriter is unhappy with.
I've worked with mortgages 11yrs - recently through Wells Fargo, got a loan approved with a homeowner whose income was sporadic (like yours) where he made more at different points of the year and none other parts of the year.
The solution is to treat you as a contractor - reporting your income through a 12 month profit and lose statement.
The 12 month average of a P&L equals your monthly income. You are probably going to need to show 12 months of bank statements and the last two years of tax returns.
I don't like the sound of them pushing you with a closing date. Ask that to email you a copy of your tri-murge credit report (saying your concerned with your credit). Black out your social sercuity number and email/fax it to a few other lenders, like Wells, BoA, direct lenders. That way your score isn't going to be affected. Banks are a dime a dozen, as long as your credit score is good, look at other larger banks that offer different programs.
If your all ready paid for an appraisal - it is a law to have the appraisal re-assigned to another leader.
I do not recommend doing a FHA loan! It is better to get a conventional loan, even with M/I that can drop off as the value increases. FHA mortgage insurance is for 5yrs minimum.
I think AK can probably find a lender who will do this, but pushing the closing date back (if feasible) could be the simplest solution.
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You putting 20% down is good, but it is the income reporting that underwriter is unhappy with.
