Relocating and buying

darren-s · Joined: 03 Oct 2007 Posts: 2

The wife and I are soon to be first-time homebuyers (maybe). After she graduates we'll be moving. That means I'll be giving up my job and she'll be starting hers. My question is, how does that affect this whole process? I see the "for Dummies" stuff that says you'll be providing salary history etc. during this process; she won't really have one and mine will be moot.

She's going to be a pharmacist and has 8 years with the company as a technician/intern and has signed up to work in the area we're moving to. So there will be income, there's just not going to be much of a history of it prior. Only part time and weekend work in between classes. Is this going to limit our options in a significant way? We will have a nice fat student loan payment when she's out but other than that we don't carry any debt.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

You'll be fine. The documentation that you will need will be to show the transcripts/diploma for the schooling, and the same job history details she'd need if she wasn't starting a new job (2 years of W2's & employment history.)

With the move she'll likely need some kind of documentation of her new income. Either an offer letter on the new position or her first pay-stub if you will be purchasing after you move.

You may be able to use your income as well, if you have a job prior to close. It would need to be in a related field from your previous position(s), but once again, the 2 year history is what is important.

Hope that helps!

m2c · Joined: 03 Aug 2005 Posts: 937

As Haplo stated, your wife’s income is “no sweat”. I would scout out the area to see if you qualify for a “reasonable” first home based on your wife’s income alone sans any projected overtime, bonuses, etc. (these are definitely out without a history).

Couldn’t tell from your “moot” reference if you intended to seek employment at the new location. If you do and if you need to include part of your projected income to qualify for that “reasonable” home, you might want to mention “trailing spouse” to the LO if and only if his/her source can do manual underwriting. This is NOT an exact fit – hence the need for manual underwriting. May even need a loan-level exception but could be reasonable. Likely wouldn’t work for 100% financing but worth looking into.

I’ve listed the criteria for “trailing spouse” so you can see where the holes are but on a manual basis I can see where you might be able to work about everything but the 680 FICO. It’s worth a try but I’d work things out with the LO beforehand. Don't "push" to overbuy -- feel comfortable if you do try to use this "quirk".

______________________________

X, 402.26: Trailing Secondary Wage Earner’s Anticipated Income (11/27/02)
It is not unusual for a household that consists of two wage earners to relocate to another area because one of the wage earners is transferred by his or her employer or finds another job in a new location. Often these individuals will find a home in the new location that they want to purchase before the other wage earner finds a new job. When the relocation takes place in connection with a documented corporate relocation offered by the primary wage earner’s employer, some (or all) of the “anticipated” income from the job that the trailing secondary wage earner expects to obtain in the new area may be considered as acceptable stable income, if the following conditions are satisfied:
• The secondary wage earner is a spouse, relative, domestic partner, fiancée, or fiancé of the primary wage earner. (See the Glossary for definitions of relative and domestic partner.) A secondary wage earner who is the fiancée or fiancé of the primary wage earner does not have to currently reside in the same household with the primary wage earner, although a secondary wage earner who is a spouse, relative, or domestic partner does.
• The secondary wage earner has been employed as a salaried employee or as an hourly wage or commissioned employee in the same profession for the past two years and must provide a written statement indicating his or her intention to obtain employment in the new location. If the lender is able to document a reasonable employment market for positions that are the same as (or similar to) the secondary wage earner’s previous position(s), the lender may consider either 100 percent of the secondary wage earner’s documented income from his or her previous employment (if the secondary wage earner’s income does not exceed 33 percent of the total qualifying income) or 50 percent of the secondary wage earner’s documented income from his or her previous employment (if the secondary wage earner’s income exceeds 33 percent of the total qualifying income). The income from the secondary wage earner’s previous employment must be verified and documented in accordance with our standard guidelines. The lender may use the latest salary for a salaried or hourly wage earner as the documented income, but should use an average of a commissioned wage earner’s income for the past two years.
• The combined incomes—actual income for the primary wage earner and “anticipated” income for the secondary wage earner—and the combined expenses of the two wage earners result in a total debt-to-income ratio of 36 percent or less. However, higher qualifying ratios may be used when strong offsetting factors exist.
• The borrowers have financial reserves (cash or other liquid assets that are easily converted to cash) at closing equal to at least six months of payments for the mortgage and all other recurring debt obligations.
• The mortgage has a “representative” credit score of 680 or higher. (The “representative” credit score for the mortgage is the applicable individual credit score for the borrower who had the lower applicable individual credit score.)
If these criteria are not satisfied, the lender may use the trailing secondary wage earner’s intent to obtain employment at the new location to justify the use of a higher qualifying ratio.

chow · Posted: Tue Oct 09, 2007 6:22 pm Post subject:

If you both can secure a job before you move, then the employment letter from the new employer will give the underwriter what they need. It should include your salary and when you intend to begin employment. You don't have two years of employment as full time-when you're a student. You just show transcripts, and what employment you did have.

darren-s · Joined: 03 Oct 2007 Posts: 2

Sweet. I mentioned my job was moot because I currently don't have a job lined up in the new place. That may or may not happen immediately so for thought experiment purposes I don't even factor that in. My history is 5 years with an engineering/construction inspection firm. Her offer was already accepted and she's received the sign-on bonus.

The area we're moving to is pretty cheap (TX Panhandle) so hopefully they won't mind too much if I am a little slow in the pickup. I might deserve a hiatus by then 8)

chow · Posted: Wed Oct 10, 2007 12:59 am Post subject:

Then just go with her income. The last thing you want to do is get too far in, too fast. Actually, if more people bought a home on a one income being used for the loan, they would be better off. A home is a castle, but some people expect that the first one should be the Kings Castle, and wouldn't settle for a mere Prince type hunting lodge.... :wink:

Jenie0109 · Joined: 27 Jan 2009 Posts: 307 Location: chicago IL

great post. thanks for all the help.