Home Loan Question - odd situation

dullard

Elite Member
May 21, 2001
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I am being forced to leave my appartment next month. I'm in a federal low income housing and I qualified using one of the exceptions (low income + student + married + filing joint taxes). Well I'm graduating (PhD Chemical Engineering) and will no longer be a student and will no longer meet the low income status. I am begging and pleading to stay another month, but I don't know how well that'll go. So probably by the end of May I'll have to move out. That gives me 2 months to find a new place to live.

I have a job lined up doing what I did for research at the company which paid for my research. They have an NIH grant coming in June which will provide guaranteed money for my salary (quite a good salary). The catch is that there is no extra money available until June to pay me. We had hopes to get the money in March so this whole issue wouldn't have been a problem, but due to some delays there isn't any extra cash to float me buy.

I'm in a situation where we really want a house. I'm in deep enough trouble with my wife for keeping us in the apartment this long as I got my PhD (we were going to move after the Master's). Keeping our apartment isn't an option and finding a new apartment won't be easy - especially for just a couple of months. The cost of moving all our heavy furnature and storing the furnature while we wait for a house is certainly a drawback of getting another apartment. Plus apartments are money pits, I'd rather have the money going towards my house.

So I need a home loan. I've got great credit scores, I've got a long term employment as I've been working for them for years, downpayment of any amount is not a problem, and I've got a guaranteed high salary. I just don't have paystubs to show the high salary - just the lowly student salary I've been on. So I'm not going to be able to get a decent home loan (US Bank loan officer didn't want to accept a promise of employment and wanted paycheck stubs). It would be a real shame to move into a crap house that we don't want to live in - when we can afford a lot better.

So my hairbrained idea is this: take my downpayment and draw up a formal written loan agreement with my friend/boss to loan the business the money. They turn around and write me a paycheck or two with that money (I thus have the money back for a downpayment, minus some tax). When June comes and they get the grant money, they don't pay me a salary but instead repay the loan (I gain back the tax that I paid earlier). Net result is that no one is harmed in either way and I have a couple of paychecks to prove the higher salary. So your opinion: stupid idea or not?

The worst I can forsee is that the business won't repay the loan, but of course they already used the loan to pay me a salary. So in the worst case senerio, I'm out the tax on a paycheck. I'm certainly willing to lose that to avoid paying movers twice, and paying for furnature storage, and to avoid all the frustrations involved with moving into a place we don't want. Is there anything else I'm not thinking of?

Any other suggestions if you think this is a bad idea?
 

bunker

Lifer
Apr 23, 2001
10,578
0
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They will also ask for your previous tax returns to see your history of income.

How you gonna fake that one? ;) :p

*EDIT - Oh and as for your idea, I'm sure the mortgage company/bank will accept a letter from your company showing how much you will be paid and that the job is guaranteed.
 

Bryophyte

Lifer
Apr 25, 2001
13,430
13
81
A letter from your future employer guaranteeing you a certain salary is enough to satisfy lenders. I know, we went through that process 2 years ago. We moved in a month before my husband started his new job. If you have a good FICO score and your salary will meet the loan requirements, you're good to go. You have to be able to pay your mortgage in the meantime, though. You can often fold your downpayment onto the loan to save some cash. Don't dick around with borrowing ahead of time from your employer.
 

dullard

Elite Member
May 21, 2001
24,188
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Maybe I need to talk to another loan officer. The first one didn't want to accept promisses from an employer.
 

DT4K

Diamond Member
Jan 21, 2002
6,944
2
81
I've known several people who bought houses a month or more before they actually started their job. They just provided the lender with a copy of the offer letter.
 

Bryophyte

Lifer
Apr 25, 2001
13,430
13
81
The lender I worked with said they do it all the time. In fact, Intel has an office specifically set up for handling lenders' calls for those types of letters.
 

woowoo

Platinum Member
Feb 17, 2003
2,092
1
0
Reaserch a No-doc Mortgage.
It will cost more in intrest but it will get you in the door (Of your new home)
 

Vic

Elite Member
Jun 12, 2001
49,411
11,603
136
You need to talk with a different lender. US Bank portfolios all their home loans and has some rather unusual and strict guidelines (compared with most other banks and lenders who stick to Fannie/Freddie conforming guidelines).

Many lenders would be happy to work with your situation, dullard. At the very least, you will need to document your education and promise of future employment (which preferably would start before the 1st payment came due). Large downpayment and excellent credit scores would practically guarantee a reasonable and excellent approval. My advice would be to find a good broker.
 

qpham11

Member
Dec 29, 2000
89
0
0
My girlfriend bought a house last year and she didn't have to verify employment or salary. Think you need 20% down and very good credit. She went thru Bank of America and got a pretty good rate at the time.
 

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