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Looking for some answers for getting approved for a mortgage. My wife and I are recently married and looking to purchase our first home in New Jersey. About 8 months ago I decided to change careers from the restaurant business to a now more stable Union position being employed by PSE&G. I have read all over different things about employment history affecting mortgage approvals. My wife has been in her career for a little over 3 years and as I said I am here 8 months. Here is a little information about us;
FICO Scores- Me- 741 Wife- 737
Cash on hand- 75k (would love to put 5% down to use difference for remodeling) willing to go to 10% down if necessary
Wife's salary- 64k
Me hourly rate- $18.00- average weekly gross over 8 months is $900 (with OT)
(Also expecting a promotion in position within a month that includes a raise)
No outstanding credit card debt
Only one $250 monthly car payment
We are looking to purchase a home between 380k-425k. I would like to know if a mortgage lender would give me a problem since my current employment history is only 8 months. Does a union position help at all?
Any help is greatly appreciated!!
Lenders look for 6 months working in the same industry history. There will be a verification of employment for both of you. Ask your trusted real estate brokers for referral to good local lenders.
You could be okay. Are you guaranteed a minimum number of hours? What exactly did you do at the restaurant? What exactly are you doing now? (Job descriptions). FHA allows (or did, last time I looked it up), a career path change, as long as there was a 6 month history in the new position.
The concern here is your number of hours. If they are all over the place - 16 hours one week, 26 the next, 43 the following, you will definitely need a 2 year history. However, if the union guarantees its members a minimum number of hours, and your paystubs support it, the income can certainly can be used. What concerns me is you phrased your "average hours." Keep in mind the underwriter will look at the year end earnings and the year to date earnings to make sure they match up. If you missed hours due to illness or FMLA, let the LO know, so they can head off concerns. Be prepared to document time off when you have less than a one year history.
I have not run any numbers, but I don't need to run them to tell you your wife on her own cannot support the mortgage you seek. One solution to proceed without your income would to get a non-occupant co-borrower. If you cannot get minimum hours guaranteed, you need to get establish a two year history.
I'm sorry. Yes I am guaranteed 40 hours a week. I worked in a family owned diner for about 6 years and then I was a General Manager for about 3 years. I now work for PSE&G which is a Fortune 500 company and I do Service in the Gas Dept. Does any of that help?
Also is there anyway to say how much total income we would need to have to get approved for 400k mortgage?
No because you have to give them some idea of where you plan to buy and how much the insurance and taxes will be. That also factors into the approval process as well as any HOA fees. Taxes are very high in NJ, my father pays $6K a year in taxes and his home is only worth about $100K.
You can get a general idea. Go to a lender and apply, give them the info and see if they don't have to do a hard pull on your credit and they can give you some idea if you qualify or not.
Here is a 4/3 in NJ at $400k and the estimate payment is $3000 a month, you would need about $6000 a month coming in to get at the 50% debt to income ration which is too high, but it depends on the down payment too, and your outstanding debts have to be adder to the payment to come to the ratio. these online estimates usually low ball the taxes or the insurance so expect it to be a higher payment.
Regarding your other question, they want 2 years of steady work history, but if you changed jobs that alone should not cause you to not be approved as long as you have your taxes/1099s etc and they can verify employment from both places.
Last edited by LifeIsGood01; 02-27-2016 at 01:38 PM..
You need 2 years of tax documents to get credit for any overtime or bonus when it comes to income needed to qualify for a loan. Without 2 years of bonus or overtime history a bank will only consider your regular hourly rate.
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