Mortgage Applying /Job Question

i would strongly suggest that you keep your job until closing. had a friend who lost her job just a week before closing and did not tell the bank. they found out and because she did not report it to anyone, lost her deposit on contract.

My thought, Zed, is any port in a storm. We don't know where the economy is going, up or further down; you may be miserable now but you'll be more miserable if you're unemployed & broke. Stay where you are & look for something else & forget purchasing right now because this time next year the prices may be even softer. Please, DON'T JUMP ! ! !

thanks for the suggestions...

ab_11218, do you know how the bank may have found out about your friend's unemployment?
That scenario keeps me up at night!
Don't know if I can wait until closing to make my job move as it is a new development, and the closing
could really drag a few months out until the building completes.

The new mortgage + cc's i'm applying for would be less than my rent now, and I have enough savings
to last almost 2 yrs. unemployed. On top of which, I am able to freely consult/freelance in my field.
My bigger concern is the bank finding out, and then not being able
to secure the mortgage and get the apt.

jmzed, normally they check again right before closing.

You have my sympathies about a miserable job....how terrible. Because of this I recommend you do not buy real estate at all, you have more protection as a renter. Also, I was a freelance for over 20 years, successful at it, and I trust you have at least 1 years' worth of living expenses in the bank before you quit...and 1.5-2 years would be better in this recession.

Sometimes people who are miserable in their jobs get fired....

BTW I applied and got plenty of mortgages/credit as a 1099-MISC earner. I have a W-2 spouse, which certainly helps, but it's not self-employment per se that's so frowned upon in my experience, it's your cash flow, credit history, debt ratio, and other things that are often less optimal for freelances. The only time I was discouraged from applying for credit as an independent contractor was when I was seeking an investment loan from a small lender; they did require W-2 income.

{Manhattan real estate agent.}

Don't quit. We just refinanced and a final step the bank did, only days before the closing, was a verbal confirmation of employment with our employers.

My recent closing, they checked with in 10 days of closing. Not sure exactly when but it was with in 10 days.

If you must buy a place, I would not quit until you close. BUT I wouldnt buy a place until you get your freelance in order. Also, if you want to buy a place while freelancing, the bank likes to see 2 years worth of freelance tax return before even considering a loan.

how would the mtge + cc's be less than rent? i thought that the current purchase/rent ratio was like 2:1

Ok, thanks all. That is exactly what I needed to find out!

I guess the next best option would be to secure a new fulltime job before quitting.Is it Ok to switch jobs during the mortgage app. process? Just my luck that one part of my life finally comes into order and the other part starts falling apart. BUT, I am miserably grateful to be employed at the moment.

printer, I would be borrowing 200K, it's a new building so it has 421A tax abatement and the CC's are pretty low. So after my calculations, (if they're correct) I would be paying about $150 less than my current rent.

Did you see the recent thread about the tax abatements actually being ticking time bombs? Anyway, best of luck to you but do proceed with extreme caution. It sounds like you're looking at new construction & by the time you're ready to close the costs/values may be lower than your agreed-upon price in which case you'll wish you'd never had this conversation.

i had to submit paystubs several times up until right before the closing, like 2 days before. banks are totally backed up with refi's, new regs, etc, so often these days they drag their *ss thru the process and by the time they are ready to close with you the info they have on file is too old and you will need to resubmit current copies of everything. i wouldn't play with fire. not only are they looking for that paystub, they are looking for established work history as well. if you have a great job but have only been there tow months i think that is a concern as well, not sure but i think they look for a year.

"new fulltime job before quitting.Is it Ok to switch jobs during the mortgage app"

The bank recommends that you need at least 2-3 months in pay stub with your new job. I went though the same thing. There was a great opportunity and I switched job after I signed the contract (mtge app in process). The bank told me that I had to start all over again and needed 2-3 paystubs. I ended up not getting that apartment because of that.

Talk to a mortgage broker in this situation to help you out. Bank agent tends to be not on the ball and it would be easy for them to just cancel the app. I was with a bank agent before turning to a mtge broker.

Also, when I needed an extension on closing, I had to resubmit all the financial doc all over again with the latest (bank statement / investment / paystub etc)

"My thought, Zed, is any port in a storm. We don't know where the economy is going, up or further down; you may be miserable now but you'll be more miserable if you're unemployed & broke. Stay where you are & look for something else & forget purchasing right now "

A-Freaking-men!

Case in point ... my two unemployed friends. They're both "consulting/freelancing", and one is living on my sofa.

In this economy, unless you're already an established consultant/freelancer, now is not the time to try to establish yourself.

jmzed - the banks will verify employment 3 days prior to closing. You will have a hard time getting a loan going from a W-2 (salaried) employee to self employed/freelance. sunny.hong@bankofamerica.com

"You will have a hard time getting a loan going from a W-2 (salaried) employee to self employed/freelance. "

Not to mention the even harder time you'll have getting past the co-op board with no job.

Unfortunately, You need to hang in there until closing.

"You need to hang in there until closing."

No. He needs to hang in there, period, and keep his job until we're out of this economic slump. This is a terrible time to strike out on your own. Or if he's so miserable in his job and absolutely insists on quitting, then he needs to remain in his rental.

"No. He needs to hang in there, period, and keep his job until we're out of this economic slump. This is a terrible time to strike out on your own."

It depends on his field. I know many people who are freelancing and doing very well. Yes- even in this economy.

Matty - its' a condo, learn to read before talking

I didn't see where he said it was a condo.

If that's the case, this helps explain why condos in this city are in so much worse shape than co-ops.

"it's a new building so it has 421A tax abatement and the CC's are pretty low" and how do you know it is a 'he'

We had some difficulty securing a mortgage because I am not paid with a W-2. BOA ended up only counting my wife's income. Wells Fargo said that it wouldn't be a problem, but I was never really convinced on that. We have high debt to income ratios, but good credit and 10 months reserves which allowed us to get a DU approved mortgage. Fannie mae just changed the rules - not sure if we would have been approved if we applied now.

I won't give you job advice other than to say that it is pretty bleak out there.

"It depends on his field. I know many people who are freelancing and doing very well. Yes- even in this economy."

I seriously doubt, Stephie, that these people are brand-new, fresh-out-of-the-box freelancers.

Even the established freelancers -- those with a proven track record with an existing client list -- are having trouble making ends meet.

Ok, we'll thanks for the tips and sobering news everyone.

For now, I plan to keep moving forward with this purchase and keep at the job until after closing. Yes I'm a he, and it's a condo :). I only hope the building finishes on time, so it does not drag on for months. Then I can start the summer with a new home and hopefully a new job.