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Please excuse me if I sound ignorant, but this will be our first home purchase. Currently we are in Cali and will be leaving in November. We are going to make a pit stop in NC for 2/3 months before moving to GA. My husband will be working as a flight instructor and one of the perks is that they provide housing. While he's in GA working, Ill be in NC living rent free with my mom and saving money. Ok, enough of the background. So I've always been under the impression that you can only get pre qualified for the income that you will make in whatever state you are going to be living in. I talked to an agent and he mentioned that we can go ahead and pre qualify now based on what my husband and I make here in Cali and sign a contract for a house to be built. Of course, that would include 2,000 down. He said that it will take the house between 5-6 months to build and that the house wouldn't close until then so when its time to sign the papers and verify income again, it will give me time to find a job so we can still qualify for the amount we were approved for based on our current salaries. He said that the lender would approve us on contigent that we will both have income in GA. Has anyone ever heard of this or have done this before?
Yes, this is definitely possible. Best thing to do is to meet with a good lender (I prefer a broker to a bank or direct lender because they can get you the best deal from multiple institutions). A good broker will be able to look at your situation and present your best options. If you have good credit you will have options. We are buying a condo in Atlanta currently while living out in Washington, based upon our jobs here...our intention is to move once we close and everything is settled.
That said, you may or may not feel comfortable taking the risk that you'll have a job that will qualify you for the home when the time comes to close. If you don't feel comfortable with that I would wait until you have located a job before putting money down on a home. Coming from California you may find you start at a lower pay. Would this affect your ability to get the loan?
Thanks for responding Noah. Well it's not like we are breaking the piggy bank here....lol. My husband is going to be seperating from the Air Force. On his salary alone, he'll make more double what he makes now. As far as I'm concern, I checked out what the pay is for the type of work I do and it's the same. I'm more than confident that we'll be fine in that area. I'm currently a Federal employee so I'm hoping to stay in that system but if not, I know I can find something else. We pretty much know that whatever we qualify for here, we have to make the same or more than what we make now. Again, thanks for responding.
Yeah we definitely won't put ourselves in a jam. We are being very pratical and will have money saved for a rainy day. The one good thing for us is the VA loan. We are guaranteed prime interest rate or lower. That will make a huge difference in our monthly payments.
So I've always been under the impression that you can only get pre qualified for the income that you will make in whatever state you are going to be living in. I talked to an agent and he mentioned that we can go ahead and pre qualify now based on what my husband and I make here in Cali and sign a contract for a house to be built. Of course, that would include 2,000 down. He said that it will take the house between 5-6 months to build and that the house wouldn't close until then so when its time to sign the papers and verify income again, it will give me time to find a job so we can still qualify for the amount we were approved for based on our current salaries. He said that the lender would approve us on contigent that we will both have income in GA. Has anyone ever heard of this or have done this before?
Honestly prequalification is not more than filling out any loan application with a balance sheet and submitting your income. If your total borrowing amount is less than 3.5 times of your combined income, you have no problem. When time comes to get actual mortgage, the bank has more strict rules. All details need to be checked to make sure the borrower is able to fullfil loan obligation. I am currently going through this process and feel that I am stripped to the bone in term of my financial situation.
The only way I would agree to do it is if I can LOAD up the sales contract with every contingency imaginable, so that if one piece of the puzzle doesn't come together by the time the home is finished, the builder has to refund your entire deposit, period. And the mortgage company's contingency doesn't protect you on the builder's contract. Don't let the sales agent tell you that they can't do contingencies. No contingencies, no deal. They'll come to the table.
In other words, it's a risky venture, so cover yourself. I personally would not build a home in a new area until I lived there for 6 - 12 months, but there are ways to insure that you don't get hung out to dry.
You will find plenty of horror stories on this forum about people who qualified for a home at the beginning of construction, and then (because of mortgage industry changes) did not qualify when the home was finished.
The only way I would agree to do it is if I can LOAD up the sales contract with every contingency imaginable, so that if one piece of the puzzle doesn't come together by the time the home is finished, the builder has to refund your entire deposit, period. And the mortgage company's contingency doesn't protect you on the builder's contract. Don't let the sales agent tell you that they can't do contingencies. No contingencies, no deal. They'll come to the table.
You will find plenty of horror stories on this forum about people who qualified for a home at the beginning of construction, and then (because of mortgage industry changes) did not qualify when the home was finished.
When you say Mortgage industry changes, are you referring to interest drops and things of that nature? Thanks for the good advice though. It's definitely something to consider.
Yeah typically incomes are higher but not in our case. My husband is in the Air Force now. Due to the nature of his career field, his salary will increase significantly. If it wasn't, we wound't even consider buying right now.
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Trust me.....
