Job history/refi

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Job history/refi

Postby camiboxer » Thu Mar 08, 2012 11:32 am

How important is length of employment when it comes to doing a refi?
Hubby was employed with the same company for 23 years. Last year he started doing independent contractor work for another company for 7 months (Feb through Sept) while still employed with previous company. We formed an s corp (he is the sole employee), he quit his job of 23 years and officially our company went into business Oct. 1. There was not one single day of a lapse in work history. The company he was doing independent contractor work for during those 8 months hired our company (husband). Technically he has been with our company or his "new" current employer for 5 months.
I am self employed (20 years) and know from previous experience that financial entities frown on self employed persons. They at least give you a few more hoops to jump through.
We have no debt other than current mortgage of $117K (home value at $150K). Credit scores over 800. We own another home valued at $200K free and clear (rental). We have a $20K emergency fund and ample other investments (for our ages).
I know *typically* they ask for previous two years tax returns, couple months of bank statements, pay check stubs, etc...so one might assume we would be okay but you know what they say about that.
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Re: Job history/refi

Postby itypefast » Thu Mar 08, 2012 5:56 pm

Sounds like you and your husband would both be considered self employed.

You'd have a hard time getting a loan at the best rate even with your higher credit scores.
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Re: Job history/refi

Postby camiboxer » Thu Mar 08, 2012 9:54 pm

Sounds like you and your husband would both be considered self employed.


Technically yes however being an employee of the company we own offers up a W2 which shows employee status. There wouldn't be any reason for the mortgage supplier to ask who owns the company (I wouldn't think). There isn't any connection to us in as far as the company name is concerned. Nothing that would put up reg flags (so to speak). Personal tax return would show income and the company has its own return filed separately. We wouldn't need to produce anything related to the company since it won't be involved with the refi.
Maybe wishful thinking on our part and I will try and obtain further info from the powers that be prior to applying.
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Re: Job history/refi

Postby damjam » Thu Mar 08, 2012 10:04 pm

camiboxer wrote:... being an employee of the company we own offers up a W2 which shows employee status


Back in 1995 we had a corporation. We had W-2's.
Never had a problem. I even got to confirm our salaries as the VP of the company. No one noticed/cared that the signature on the salary conformation form was the same as the applicant.
Of course that was a long time ago, but it was before the relaxation of standards that precipitated the bubble.
It might be worthwhile to speak to a mortgage broker.
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Re: Job history/refi

Postby stan1 » Thu Mar 08, 2012 10:38 pm

We recently applied for a mortgage re-fi. We had to provide pay stubs and bank statements as always, but we also had to give the lender permission to obtain a copy of our Federal tax return from the IRS. Its probably case by case whether that will help you with the approval process, or not help.
Last edited by stan1 on Thu Mar 08, 2012 10:44 pm, edited 1 time in total.
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Re: Job history/refi

Postby fareastwarriors » Thu Mar 08, 2012 10:41 pm

How long of a employment history would someone like me need to get a decent mortgage rate with say 20% down?
I just started working full time half a year ago and I have not filed taxes for 2011. Too soon?
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Re: Job history/refi

Postby stan1 » Thu Mar 08, 2012 10:46 pm

fareastwarriors wrote:How long of a employment history would someone like me need to get a decent mortgage rate with say 20% down?
I just started working full time half a year ago and I have not filed taxes for 2011. Too soon?


It depends. Did you just graduate from college, do you have other debts (eg car, student loans), and how far are you stretching to buy a house?

No credit history is viewed more favorably than bad credit history.
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Re: Job history/refi

Postby camiboxer » Tue Mar 20, 2012 10:00 am

UPDATE:

I contacted the mortgage broker who did our last refi (she knows our situation/acquaintances).
From her point of view it does not appear as if we would be able to refinance at this time (at least with her company).
Underwriting requires at least 2 years of 40/hr week salaried employee status. Hubby is technically self-employed and has only been with our own company for 5 months. My 20 year self employment status is of no help.
It was suggested that we apply with another lender who doesn't know the background (starting a company) and just supply them with typical documents as with any other refi. I would love to have a lower rate with a shorter term but don't think I am willing to lose an app fee and other related expenses if we are denied. We also would have an issue with a "pay check stub" since I write hubby a check weekly out of the corporate account, minus an actual check stub which would show withholding's.
I have not given up just yet and will inquire with other lenders about requirements for length of employment with current employer and see what happens. The 30 year @ 4.5% is causing me to lose sleep. Not that we can't afford it but I hate knowing something better is out there and might be out of reach.
If anyone had any great ideas I haven't considered I would appreciate them.
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