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I am currently a postdoc at a university in AZ, and have had this job for approx two years this August. I am moving to SC to start a tenure-track job at a college, and I am officially employed starting in August. There will be no lapse in employment. I have a letter stating that I will be employed at the college.
I have set a closing date for a house in SC for July 7th. I will still be employed from AZ but not in SC yet. I was told from my loan processor the following:
"I did get a response from the FHA underwriting..On a new home purchase, FHA requires that you have to be on the job for atleast 1 day for the lender to physically fund and close the loan. I understand your moving to a different state and I was just informed of this so I wanted you to be aware. The bank can lock your loan, process your loan, and underwrite your loan fully, but cannot close until they have a verification of employment of atleast 1 day on the job."
Has anyone heard of this before? This seems a little ridiculous? I can't close on a home I want to move in before I start my new job? Does this seem fishy to anyone? This is a reputable company... perhaps my processor just doesn't know what he's talking about?
Any help would be greatly appreciated. I've never owned a house before, and I am very anxious about this process. Everything appeared to be going smoothly (the assessor has come in, we were pre-approved for well over what we needed, inspections have been fine, etc) but this is the first "bad" thing that has popped up. I can't postpone closing, otherwise I'll forfeit the house.
So what are my options then? I HAVE to switch to a traditional mortgage? What else can I possibly do if I need to close on July 7th but my new job doesn't start until August?
This isn't weird that you can't buy a house using an FHA mortgage before you move somewhere? That seems awfully strange to me. I would think all that would be necessary is proof of future employment...
If I start work, then they have to start benefits and whatnot. I guess I can give it a shot and contact them and see if they can just draw up something saying I start in July, but not pay me or give me benefits until I'm really supposed to start, but then I would guess since I'm not getting paid the mortgage company might take exception to that. Right?
There isn't anything else I can do. I really don't understand it... it's not like I'm unemployed. I can't buy a house using FHA before I'm about to switch jobs... no matter what??
It states in my offer letter that I sent to the mortgage company that it is 9 months, with possibility for an extra month in the summer.
In reality, I can work all summer if I want by requesting to teach extra classes. It all depends on how our finances work out at the end of the year. If I need to work, I will. If not, hopefully my wife, daughter and I get a nice month or month and a half off!
I'm looking at my contract right now, it states my official start date August 11th, which is the "new staff orientation day".
Like I said... I'm still employed from AZ, so it's not like I can go out to SC and just "start work" ... especially since there is nothing for me to do there until classes start!
So... out of curiosity. Whose rule is this that I can't get the FHA mortgage before starting my employment? I'm no lawyer (I'm actually a mathematician) but it states pretty clearly here in the FHA handbook:
"Projected income is acceptable for qualifying purposes for a borrower scheduled to start a new job within 60 days of loan closing if there is a guaranteed, non-revocable contract for employment.
The lender must verify that the borrower will have sufficient income or cash reserves to support the mortgage payment and any other obligations between loan closing and the start of employment. Examples of this type of scenario are teachers whose contracts begin with the new school year, or physicians beginning a residency after the loan closes fall under this category.
The loan is not eligible for endorsement if the loan closes more than 60 days before the borrower starts the new job. To be eligible for endorsement, the lender must obtain from the borrower a pay stub or other acceptable evidence indicating that he/she has started the new job."
This is out of HUD 4155.1, 4.E.5.d.
Perhaps this applies to something different, or I am misreading this. Doesn't this state that a contract should be enough if I'm starting within 60 days?
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Originally Posted by dosterpf
So... out of curiosity. Whose rule is this that I can't get the FHA mortgage before starting my employment? I'm no lawyer (I'm actually a mathematician) but it states pretty clearly here in the FHA handbook:
"Projected income is acceptable for qualifying purposes for a borrower scheduled to start a new job within 60 days of loan closing if there is a guaranteed, non-revocable contract for employment.
The lender must verify that the borrower will have sufficient income or cash reserves to support the mortgage payment and any other obligations between loan closing and the start of employment. Examples of this type of scenario are teachers whose contracts begin with the new school year, or physicians beginning a residency after the loan closes fall under this category.
The loan is not eligible for endorsement if the loan closes more than 60 days before the borrower starts the new job. To be eligible for endorsement, the lender must obtain from the borrower a pay stub or other acceptable evidence indicating that he/she has started the new job."
This is out of HUD 4155.1, 4.E.5.d.
Perhaps this applies to something different, or I am misreading this. Doesn't this state that a contract should be enough if I'm starting within 60 days?
The 4155.1 is a booklet of guidelines. It is at a lender's discretion if they want to underwrite to stricter guidelines. Most lender's are underwriting much stricter than FHA guidelines.
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