Question Details

Erica Gentry, Both Buyer and Seller in 10019

As a recent college graduate, I need help finding a home loan/lender. I have worked for two years, but I

Asked by Erica Gentry, 10019 Sat May 9, 2009

either worked under the table or as a contract employee (though full-time). I have a stable current income and save more than the amount the monthly payment would be each month. So, I do feel I can afford a house... my income history is just not there to prove it. Wells Fargo has been no help. What would be a good place to go from here? Do I have any hope at all?

Thanks so much!

Erica

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Answers

3
Thanks, all, so much for your responses.

James, Marty -- your advice matches up to the advice given to me by Wells Fargo. The Wells broker mentioned two things that would help with my self-employment income situation: 1- a letter from my employer verifying that I work a minimum number of hours and 2- showing that I work in a role related to my education, just as you mentioned, Marty.

I think I can do both of these things without a problem.

Joe is also correct to mention that I cannot afford to pay cash for a property, therefore I literally cannot afford to buy a house. Thankfully, the real estate financial market has been structured to allow non-full-cash buyers to lease-to-own a house. That restructuring changed the market quite positively; but the negative consequences that resulted from our recent real estate bubble are mostly all we are thinking of these days.

I am new to the real estate market; this would be my first home purchase. I'm lucky, in a way, to not have been a part of the burst and downfall, but also unlucky to face such a tough situation obtaining a loan after all this trauma. Again, I bring up the point that I cannot buy in full, but I can afford to pay a mortgage payment.

A detail which I did not include previously is that mortgage payments for the house I want to buy would be similar to what I pay in rent currently. I have a perfect rental payment history at monthly rents even higher than what I now pay. I do have income, savings, a job and an education. I do not want to speculate on future income or get into anything that I could not afford. I am very prudent... but how can I show this? I had no idea that being employed as a contractor would so impact my chances of getting a mortgage.

I'm looking for help as someone inexperienced as a homebuyer, it's true. But it doesn't mean I shouldn't be buying a home. I need to know what to bring to the table and who to ask to sit down with me at that table.

Thanks again,

Erica
0 votes Thank Flag Link Mon May 11, 2009
If you recently graduated and are now working as a regular full-time employee in the same field as your college major, then you should be okay. This is an exception to the normal 2 yr documented work history requirement for government loan programs such as FHA. For conventional financing, documentation of your work history is less of an issue. But across the board in this post-boom era, income must be reported to the IRS to be counted for mortgage underwriting, and if you're self-employed (for instance, a 1099 contractor), the analysis will be based on tax returns. Using bank statements to prove your income is a non-starter these days.
0 votes Thank Flag Link Sun May 10, 2009
Ok, aside from Joe and his self righteousness, here's some advice. If you can currently show the income to support the payment, you should be good to go. Sit down with a mortgage broker and discuss.

I am a mortgage broker. If I can be of service, please let me know!

MSmith@PrecisionFundingUSA.com

Marty

I am on line now!
0 votes Thank Flag Link Sun May 10, 2009
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