For many graduating from college or starting in a new area, it's difficult to buy a new home until you have been on your job for a while. What happens if you decide to move to a new state and you have a new job, but can't get a mortgage until you have been there for 6 months? There are some options depending on your situation that will allow you to buy before you start work. I just had a client that moved to Minnesota and was starting a new job – she really wanted to buy a home and move in before she started work. We were able to get her into a new mortgage and she had time to settle in her home before she started work!
Freddie Mac will allow you to close on a new home before you start your job as long as you meet the criteria. Not all lenders will allow this so you need to ask your loan officer if it's an option. The criteria are:
- Provide a non-contingent offer letter, signed by the applicant and the new employer
- Provide evidence that the job start date is within 90 days of the mortgage closing date
- Provide evidence that the income is the borrower's primary employment and income source
- Provide evidence that the subject home is a detached single-family residence, town home or condominium
- Sufficient reserves to pay mortgage payments plus real estate taxes and homeowners insurance during the gap between closing and the job start date, plus at least one month of reserves
If you are able to do this, you may be able to qualify for a new home before you start work! Your loan officer may have to make sure the lender is willing to accept this, there are lenders that are currently changing their requirements and now will allow this. I just saw an email from another lender that we work with that will allow this.
The most important part is the offer letter – it has to be non-contingent and signed by you and the employer. It's great for those that are teachers or work at schools where they may transfer during the summer and this will give them a chance to get settled before starting work.
If you have questions on this program or any other, please feel free to contact me and I'll be happy to help you!