Financing in Pasadena>Question Details

Loanfretter, Home Buyer in Pasadena, CA

Can I get approved?

Asked by Loanfretter, Pasadena, CA Tue Dec 29, 2009

I have been out of work for two years, but recently (Sept '09) took a job and make $75k annually. I am looking for a conventional loan and will put 20% down (property is < $300k). Do you believe that I can get approved for this loan? I have excellent credit and no debts.

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What is the reason you were out of work? Are you in the same business prior to the 2 year gap?
0 votes Thank Flag Link Tue Dec 29, 2009
Hi Home Buyer ~

Sounds like you have a great job so congrats on that. Since you're asking about conventional financing let's talk about Fannie Mae's employment guidelines. First of all, Fannie Mae does NOT require 2 years of "continous employment" history. They do however want to see a 2 year history of stable income. Here's the part of Fannie's guidelines that would apply to your situation:

"a borrower who has an income history of less than 24 months may be considered if the lender is able to define and document the borrower's income as being stable, predictable, and likely to continue". To get pre-approved, you will be asked to explain and document your previous 2 year history as well as why you had a 2 year gap.

I suggest you work with a mortgage broker because they have a wide variety of lenders to choose from. You want them to find a conventional lender with NO 'OVERLAYS". This means the lender accepts Fannie Mae guidelines and doesn't add additional restrictions. Many lender add these overlays and they vary lender to lender. A mortgage broker can take your unique situation and find the right lender match.

Once you complete a loan application, supply your income & asset documentation and have your credit run, your lender can submit the information to Fannie Mae for approval. If Fannie Mae gives you "thumbs up" you are pre-approved and can go home shopping. If the decision comes back referred, your mortgage advisor can submit your loan package to a lender for manual underwriting. If it all makes sense to an underwriter, you're good to go. I wish you all the best!

To Your Success,
Barbara
0 votes Thank Flag Link Tue Dec 29, 2009
The other thing I forgot to add is that if you are employed for a period of 6 months after your absence, you should be good to buy. The option also is to provide a work contract, if you have one or can get one from your employer. There are several possibilities but as I said, you really need a Loan Officer to review your specific situation to know what can or cannot be accomplished.
0 votes Thank Flag Link Tue Dec 29, 2009
With good credit and your new employment in the same line of work you should be successful. I have noticed some lenders are now requiring you be on the job for six months after an employment gap. Ask lot's of questions of the loan officer and be prepared with a letter of explanation regarding the employment gap. Good Luck
0 votes Thank Flag Link Tue Dec 29, 2009
Hi Fretter,

Don't Fret. It is a bit more difficult to qualify someone who has been out of the workplace for 2 years or more. However, there are situations that if explained and it makes sense, you can get around the problem. The down payment part is not so much the issue so I am not convinced that will help the situation much. I have a lot of questions to ask as, obviously, there are reasons that kept you out of the workforce. I would be happy to assist you and exploring your options.

You can reach me via email or phone.

Ted Canto
Direct: 888.724.7402
Email: ted@tedcanto.com
0 votes Thank Flag Link Tue Dec 29, 2009
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