Using a Job Offer to Get a Mortgage

Making a job change is usually an exciting, and somewhat nerve wracking occasion.  The anticipation of a learning curve and training, the annoyance of a change in schedule or winding down work already started.  Add on top of all that a relocation or a move to the mix, and that opportunity starts to look like an awful lot of anxiety.

 

If a home purchase is involved with a job change, it’s important to know what your options are for a relocation mortgage or getting a loan for a job you haven’t started yet.

Mortgages for relocating professionals, teachers, and others with firm job offers
Mason Mac Offers Job Offer Letter Mortgage Loans

The Paystub Myth

Lots of people think they need to have a pay stub in order to get approved for a mortgage.  Why do they think this?  Because a lot of lenders even believe this is true.  And it is partially true.  For delivery of a loan to Fannie Mae (think most conventional loans), a pay stub is required.  But that doesn’t mean a lender can’t close and fund a loan, and deliver it later.  It comes down to a lender’s risk appetite.

Freddie Mac, the other outlet for conventional loans, doesn’t even require a pay stub at all.  Neither does HUD (neither FHA nor USDA loan require a pay stub prior to closing).

Bottom line, if buying a home before you start your new job would make your life easier, you’ve got plenty of options to do just that.

 

The Job Offer Letter Mortgage

With a job offer letter mortgage, you can qualify to buy a home with a non-contingent offer letter from a future employer.  Obviously, the offer has to be accepted before we can move forward with funding a loan.  And what about the phrase “non-contingent”?  Well, that means there can’t be unreasonable barriers to the offer being carried out.  For example, a recent law school grad cannot use a job offer letter that’s contingent on passing the Bar exam.

A job offer letter must clearly outline employment terms – namely salary and start date.  If that info is present and the income isn’t variable or commission-based, a lender can approve and fund a loan with nothing more than the offer letter for income documentation.

 

What types of loans are eligible?

Conventional loans (as little as 3% down) are able to be approved with a job offer letter (per the above – it must be a Freddie Mac loan, and must be on a primary residence).  FHA loans (as little as 3.5% down, and able to use HUD-approved down payment assistance program) can be approved with a job offer letter, too!  For our Veterans, VA will also accept a fully executed, non-contingent job offer letter as evidence of income to qualify.

As you can see, there are many options for someone wanting to buy a home before the start date of a new job.

 

Who Is a Job Offer Letter Mortgage Good For?

Anyone with a firm job offer letter that outlines a start date and base salary can use their letter to get a mortgage closed and funded before their start date.  Generally, the loan must close within 60 days of the employment start date, and lenders may require a borrower to have adequate funds to cover house expenses before the new salary will begin.

The program is especially beneficial for relocating professionals that want to buy and settle into a new area before their new position begins.  It is also a big hit with teachers and others in academia who often don’t see income until the start of a school year.  Any type of seasonal work can benefit tremendously from using a job offer letter mortgage.

 

Important to Remember

 

Not all lenders are created equal – many lenders will have the “we need a pay stub” overlay, but at Mason Mac, we can work with your job offer letter and get your loan approved and closed without a pay stub.

If you have any questions about your job offer letter scenario, or the need for a mortgage while relocating, please give us a call today or get an immediate response by asking an expert here!

 

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