Author Topic: Mortgage qualification employment history  (Read 700 times)

mousebandit

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Mortgage qualification employment history
« on: December 09, 2017, 02:17:00 PM »
I'm looking at what I need to do and how long it would take for me to qualify for mortgage on an owner occupied sfh, if I needed to apply on my own, without the husband. 

My big issue will be the two-year employment history, since I've been a sahm for many years now.  I have been reading and see that the two year history doesn't need to be with the same employer, if both jobs were in the same industry. 

I worked last tax season as a tax preparer, with a 12-month employment contract, even though I only worked during the season.  For 2018 I have been intending to start taking a w2 salary from one of our small businesses, which have been set up, but won't be active until after the new year.  One is a RE flip business, and the other is an independent tax prep business. 

The RE business is likely to generate enough profits to cover my wages and still turn a profit.  But I worry that it would be considered a different industry than tax prep for the two-year history requirement.  The independent tax prep business isn't likely to generate enough income to cover a sufficient annual salary to qualify for a mortgage, although it's obviously the same industry.

Or am I overthinking this, and as long as I have sufficient Pass-through income, profits, between the two businesses, then I would be ok?  Both businesses are in my name only, and I wouldn't expect to need to apply for a mortgage until 2019.  I also do not want to do any projections that rely on child support or alimony, simply due to the uncertainties inherent there.  If I need to float my own boat, then I need to ensure that I can do it myself. 

tralfamadorian

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Re: Mortgage qualification employment history
« Reply #1 on: December 09, 2017, 03:45:55 PM »
The RE business is likely to generate enough profits to cover my wages and still turn a profit.  But I worry that it would be considered a different industry than tax prep for the two-year history requirement. 

Yes, this the way they would evaluate it. Could you pick up a little more tax business to get to the income requirement? 

BlueHouse

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Re: Mortgage qualification employment history
« Reply #2 on: December 09, 2017, 06:39:31 PM »
I took a mortgage loan in 2012 and because I had a pass-through income (S-Corp), I had to show tax returns for the previous two years.  I closed in March, which meant that I had to take the previous year's tax return and get EVERY.PAGE stamped by the IRS showing they received it. 

I'm not sure whether it was because I was considered "self-employed" as an s-corp, or the timing so soon after the meltdown required more info, but it was a pain to get approved.  For previous mortgages,  I literally just supplied a SSN. 


cchrissyy

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Re: Mortgage qualification employment history
« Reply #3 on: December 09, 2017, 07:07:37 PM »
no you're not overthinking it. this will be an actual problem until you have 2 years of tax returns showing the full income you want them to show from any/all streams of income you're relying on to qualify.

it sounds like you're trying to refi on your own as part of keeping the house in a divorce? ok cool. but you'll need more time to do this. it is common to get a longer time frame written in to your agreement. sounds like you'll want 3 years, but if you can get more, do it. Are you in mediation for this and other matters? maybe ask for 5 years.

on the other hand, the bank should start counting alimony and child support without the 2 years, simply based on the court order. i saw you saying you don't want it to come down to that but the fact is, if it's good enough for the bank, and it gets you past the paperwork details of your otherwise-OK income, then there's no reason not to let them process it based in part on that stuff.

mousebandit

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Re: Mortgage qualification employment history
« Reply #4 on: December 10, 2017, 12:08:33 AM »
We currently own the house free and clear.  Getting a HELOC now, in husbands name only, which I will have access to.

 Things are stable right now, with promises that they will stay that way, but There have been problems in the past that, if they returned, would result in kids and I vacating home and going far away, and no guarantees of any "civil proceedings" going forth or being civil, iykwim.  Before things stabilized, I had a fairly good plan in place, but I hadn't fully thought out returning to work, buying a house in my name with only my credit, etc.

 I hope to God that I never need any of these contingency plans, but if I do, the odds of appearing in front of judges, and decrees, and all that is low.  Violence begets violence.

 If I find myself there, I need to be prepared as best I can to support my kids on my own.  Renting for a couple of years isn't the end of the world.  That's the conclusion that I keep coming to as I think this over and over.  In fact, under the circumstances we would be facing, it would probably be better to have that long to let the dust settle, see if there's any civil action, and decompress a little.  I'm a planner, and like to have things all planned out in advance,  but I am starting to think that isn't going to be completely possible here. 

Ty for the suggestions!  Hopefully I won't need any of them!