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Mortgage question

post #1 of 19
5/27/08 at 9:05pm
Thread Starter 
My wife will finish residency next year and start with a group practice. From the businesses she has interviewed with so far, and from speaking with friends, she can expect to start out making x, with annual raises of 20k or so a year, until she can become a partner in a few years, at which point she would make a little more than double her starting salary.

My question is, how is that relatively uncommon circumstance viewed from a loan officer's perspective? I am assuming even if she has a contract guaranteeing her x% raise per year, they will only consider what we are making at that time. We're considering moving during her first year and this will likely impact that decision. Thanks...
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post #2 of 19
5/27/08 at 10:14pm
dont take this the wrong way but its kinda like " I'll gladly pay you tuesday for a hamburger today" if you know what I mean - more power to you if the bank signs off!
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post #3 of 19
5/27/08 at 11:00pm
Especially in the current environment, I think it is pretty unlikely that they would qualify her at anything other than her current (or soon-to-be) salary. After all, you have to start paying now, not in x years. Of course, you could apply for an adjustable-rate mortgage, which might give you lower payments now (=higher principal loan amount at given monthly payment) in exchange for reset risk later.

I realize that the suggestion may elicit gasps given the events of the last year. But reputable companies such as ING are still offering 5-25 and 7-23 ARMs. One of those might be a good fit for your situation, notwithstanding the public-image pummeling that ARMs have taken of late.
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post #4 of 19
5/28/08 at 10:31am
Agree with grimslade. ARMs are designed specifically for this situation, and can be a good choice if salary increases are certain.
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post #5 of 19
5/28/08 at 11:21am
I'd say that if you go with a smaller and more local bank, there is a better chance that they would take circumstances like that into consideration because they have a more personal approach to lending. I used a smaller regional bank for my mortgage and they gave us a much better rate than the bigger banks because they actually look at each application individually instead of just plugging them into a computer that spits out "accept" or "reject."
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post #6 of 19
5/28/08 at 11:54am
Scrutiny of underwriting has grown greatly since the start of the current sub-prime mess. My prediction is this will not be a slam dunk approval and for sure, they are going to only use income currently occurring. They might even ask for co-signers unless you have an established employment record. Doing some ground work into financing a build, I can tell you jumbo mortgages are going for over 8% at the moment. As AC said above, a 7/23 or 5/25 ARM is probably the best way to go, as hopefully jumbo rates will drop in a few years and you can re-fi into something better than over 8%.
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post #7 of 19
5/28/08 at 12:08pm
Quote:
Originally Posted by Piobaire View Post
Doing some ground work into financing a build, I can tell you jumbo mortgages are going for over 8% at the moment.
? We're getting a jumbo ARM for way way below that and the 30-yr fixed rate jumbo we were quoted was 6.25%
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post #8 of 19
5/28/08 at 12:11pm
Go talk to a private banker...they are familiar with your situation and probably deal with it on a regular basis.
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post #9 of 19
5/28/08 at 12:21pm
Quote:
Originally Posted by gdl203 View Post
? We're getting a jumbo ARM for way way below that and the 30-yr fixed rate jumbo we were quoted was 6.25%

Someone at the B of A quoted me 5.25% on a 7/23 jumbo ARM but 8.5% on a 30 year fixed jumbo. When did you get your mortgage? The situation has changed drastically in the last 18 months.
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post #10 of 19
5/28/08 at 12:21pm
Quote:
Originally Posted by gdl203 View Post
? We're getting a jumbo ARM for way way below that and the 30-yr fixed rate jumbo we were quoted was 6.25%

+1. My wife and I closed in the middle of April. We have a 30 yr fixed rate jumbo at 6.375%. Also, I started working as an attorney in 2006 and my wife started working as a pharmacist in 2007 (which means that neither one of us has an extensive work history). Now that there is a "mortgage crisis" banks are actually more willing than ever to give loans to people who are actually qualified. Like I said, look for the banks that aren't making decisions based on snap judments or computer read-outs. Look for banks that are making decisions based on actually looking at people's situations.
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post #11 of 19
5/28/08 at 12:21pm
Quote:
Originally Posted by Piobaire View Post
Someone at the B of A quoted me 5.25% on a 7/23 jumbo ARM but 8.5% on a 30 year fixed jumbo. When did you get your mortgage? The situation has changed drastically in the last 18 months.
No - these are the rates right now. Check again (or get a mortgage broker)
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post #12 of 19
5/28/08 at 12:24pm
Quote:
Originally Posted by Piobaire View Post
Someone at the B of A quoted me 5.25% on a 7/23 jumbo ARM but 8.5% on a 30 year fixed jumbo. When did you get your mortgage? The situation has changed drastically in the last 18 months.

Are you sure those aren't the rates for construction loans (which represent significantly higher risk)?
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post #13 of 19
5/28/08 at 12:24pm
Quote:
Originally Posted by gdl203 View Post
No - these are the rates right now. Check again (or get a mortgage broker)

I guess I will do some serious shopping if I decide to go through with this project. I wonder if the fact I am thinking about a construction loan folding into an eventual mortgage has something to do with the rates I am getting quoted?
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post #14 of 19
5/28/08 at 12:25pm
Quote:
Originally Posted by Piobaire View Post
I guess I will do some serious shopping if I decide to go through with this project. I wonder if the fact I am thinking about a construction loan folding into an eventual mortgage has something to do with the rates I am getting quoted?
That may be what's going on...

http://www.bankrate.com/brm/graphs/g...w_mpro_mtg_all
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post #15 of 19
5/28/08 at 6:25pm
Quote:
Originally Posted by Piobaire View Post
Someone at the B of A quoted me 5.25% on a 7/23 jumbo ARM but 8.5% on a 30 year fixed jumbo. When did you get your mortgage? The situation has changed drastically in the last 18 months.

I just locked 5.375% on a 5/5 jumbo ARM a couple weeks ago. Of course the rate dropped to 5.25% the next day, but it's back up to 5.5% today, so I feel content.

I had to document everything for my income, but my girlfriend's income (she is on the contract as well) was not much of an issue. That came to us as a relief because she went freelance within the last 12 months, so it could have been dicey. If your income is enough to cover the monthly payment, they may not even care about your wife's income today or in the future.
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