For those of you who are unfamiliar with the game show "Who wants to be a millionaire?", this is a way for contestants to ask a friend about a question that has come up while playing. So, on to my question:
Actually, lies, I'm going to give some background first. I've submitted my information for my security clearance. I'm waiting on that and will hopefully hear back in the next couple of days. At that point, the HR department at my new job can set Sabrina and I up with a relocation specialist who will be able to help us move to Tucson. Sabrina and I have been discussing buying a home, and would like to immediately if possible. We'll definitely attempt to get prequalified, but don't want to start initiating anything until we know when we're actually going to be looking. The question comes down to this:
We've heard that you should have a minimum of 2 years working at the same place in order to qualify for a home loan. Obviously we won't have that luxury. Provided we can scrape together a decent down payment, and that our credit scores are in the excellent range, do mortgage companies lend to people who are just starting a new job straight out of college? Or are we most likely stuck renting for a period? We'd love to hear from anyone who has experience with this, though we recognize that the latest mortgage crisis might have changed the way lenders are willing to lend.
9 comments:
Both my brother and I (and our wives) just purchased homes over the summer. Neither of us had been at our jobs for more than a month or two. I hadn't even gotten my first salary-sized paycheck when we got our loan. I think that what it really comes down to right now is whether or not they see you as a risk. If you credit score is high (luckily ours was in the very high 700s) then you should have no problem getting a home loan.
As an added bonus, In July Congress passed a housing bill that gives a $7500 interest-free tax loan that you can claim on this year's taxes. As a caveat, you've got to pay the government back $500/yr for 15 years.
Best of luck!
I just wanted to give you a broker to talk to. His office is right next to where I used to work off of State St in Orem and he is definitely the BEST! He gets any loan through and is completely up front and so honest with everyone (unlike a LOT of loan officers). He also does loans for AZ as well. So you could talk to him in Utah and still work w/him when you come to AZ. His name is Greg Greer of Atherton Mortgage. He is the owner. Their # is 801-226-6334. You can tell him I told you to call. Let me just say that when I was working in real estate, having a good loan officer is everything! A lot will tell you "everything is great!" Then you go to close and it falls through. I can't tell you how many times that happened and it's all b/c of a stupid loan officer that wants a sale. So anyway give him a call and you can't go wrong! Here's his email too if you want that greg@athertonmortgage.com
Our mortgage broker has told us he just needs 1 paycheck to verify income. Plus bank statements and all that. I don't think it should be a problem. Hooray for house hunting!
Something you should consider is whether or not you should buy a home at this time. DON'T think of it as being “stuck” renting because there are MANY benefits to renting as well as buying. Buying as soon as possible may not be a wise move, considering the economy and housing market. Here are a few advantages to renting in an area before buying.
1. You can save enough for a good down payment as well as building up a rainy day fund. Having a nice reserve in the bank will help you sleep easier.
2. It takes time to get a feel for the city you'll be living in. Purchasing a house without doing the proper research on location, timing, etc can result in you being “stuck” in a house that you do NOT want. Taking your time will ensure that you can get into the right place for your circumstances.
3. Lastly, I recommend checking out www.zillow.com to see what the market is doing in Arizona. 1 in 6 Americans is underwater in their home (I'm one of them). If you get underwater as well, then you really WILL be stuck. You won't be able to sell your home and move because you won't be able to pay off the mortgage. You are gambling if you buy without some knowledge of the real estate market in your area. Buying a home is the biggest debt you will ever take on in your life and you shouldn't rush into it.
Send me an email if you want additional sobering information.
I would probably agree with Richard on this one. Unless you know the area where you are moving really well it would probably be a good idea to rent for a few months, get to know the area better. Plus house prices in AZ are dropping like bombs I saw a report that had Phoenix and Vegas as the fastest declining house prices in the US.
The other challenge you may have is the tightening of the credit market, most in the last two weeks. But in the next 6 months I would expect to see it relax back to normal. Plus at the rate that the fed is moving right now I would expect interest rates to be about 1% come next March (j/k, but maybe not).
May I second gooch's comment. We used Greg and we HAD shopped around with other broker's through family referrals and internet. He did better than all of them, he was WONDERFUL to work with too!
I worked for a mortgage company for a while (just as an assistant so I don't know all the details) but I believe that it's not a problem as long as there was a reason for not having a job (such as being in school). Good luck!
Mitch and I bought our townhome only a couple months after he graduated... no need to verify years of employment. If you have a steady income (large enough to pay the mortgage and other expenses), good credit, and your down payment saved, you will be fine! Good luck!
I agree with Rich. Buying is a huge commitment compared to renting. I would consider renting for at least 6 months to see how you feel about the area. I know many people who have homes they couldn't sell when they wanted to. Instead they ended up having to do things like:
-move anyway and rent out their house, which means of course they can't buy in their new place
-put off going to MBA school because they couldn't sell their house
-move in with their parents while they wait for their house to sell where they used to live.
I would consider reading some books on home buying such as "Home buying for dummies" (not saying you are one, we just thought it was a great book).
We are so glad we didn't buy right away when we got here, but we are also glad that we did eventually buy. However, we won't know if that was a good decision, at least financially, until we move.
Good luck!
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