Question Details

Submatrix, Both Buyer and Seller in Chesapeake, VA

Can an ex-military contractor get a loan?

Asked by Submatrix, Chesapeake, VA Sat Aug 3, 2013

I just recently got out of the military after 7.5 years and am starting work as a contractor in a contract-to-hire position and am wondering what my chances are of getting a loan. The position is in-line with both my degree and what I did in the military.

I have heard that contractors need two years of job history to get a loan but also heard that ex-military contracting in their same field are sometimes exempt from this rule but this is all by word of mouth. I was asked if I wanted to be paid via a W-2 or a 1099 and the HR person recommended that I choose W-2 if I was looking to buy a house so that it would look like steadier income. But how much does this really matter because I'm under the impression that the bank will contact my employer and discover that my position is a contract position anyways.

Any insight or suggestions would be much appreciated.

Help the community by answering this question:


Hi Submatrix
Thank you for your Service. As long as you had no lapse in employment from military to civilian work some banks are able to make this work. Your best option would be to contact a local lender and tell them your situation and see what they have to say as all lenders have different guidelines. Hope this helps and best of luck to you.
1 vote Thank Flag Link Sat Aug 3, 2013
I had a two month lapse between separating, finding, interviewing for, and starting the new job. Is this lapse problematic or does being able to logically justify the lapse count for something?
Flag Sun Aug 4, 2013
Hi Christopher,

Sorry I'm a little late to the party! Are you in a DOD or other government contract? How long before the contract is up? If you didn't have a lengthy lapse between your military service and this new contractor position and your contract is for at least a couple of years, I don't think you should have any problems.

I say this based on our own experience. My husband is a retired-military, DOD contractor and after his company transferred him to Tucson, AZ, we didn't have any trouble at all qualifying for a mortgage. In fact, lenders were so welcoming, they were willing to pay $5,000 toward our closing costs! Just get the last couple of years W-2's and tax returns together, plus some recent pay stubs. Yes, your company will tell them you're on a contract, but as I mentioned before, as long as there's a couple years left, you should be fine! 1099's seem to raise more flags for lenders than W-2's; it's definitely not a deal breaker, but there would probably be additional paperwork involved.

I suggest contacting a local real estate agent (ask around at your new job or look for reviews on Trulia or Zillow). may be another good resource for you. Let them know your situation & ask if there are any local lenders they recommend. Before letting them run your credit, make sure the income stuff is a go.

I wish you the best of luck. If you have any other questions about real estate or VA loans, don't hesitate to give me a call!

Shawn Devoid
Chartered Real Estate Consultant
Tierra Antigua Realty
0 votes Thank Flag Link Wed Aug 7, 2013
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