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I am employed on a yearly contract. What does this mean for a mortgage application?

I am employed on a yearly contract. I make 48,000, and this is my 4th year. My husband is permanently employed at 50,000, but has only been in the job 1 year. Before that, he was in grad school and worked co-ops and in an unrelated field. We have good credit (we should each be above 700) and 20 percent to put down on the 140,000-170,000 range houses we are interested in. We have about 800$ / month in recurring debt ( all student loans; we pay all ccs off monthly; we own our cars out right). I think we shoud be a good loan prospect, but I'm really worried about how my contact employment will impact our mortgage, especially as everything seems to be electronic, so I can't explain that I will be able and willing to find work when my current contract ends... Has anyone else had recent experience with mortgage loans and contract employment like mine?
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September 10 2013 - Cincinnati
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Answers (3)

Hello,

We would need clarification. In on sentance you are saying that you are only on a year contract and in another you are saying you are there for four years. Most teachers are on year contracts, they are able to qualify as long as we see the contract. What do you do?

On another note, you may be able to qualify under just your husband if there is a problem proving your continuation of income. He has a two year work history and we can go off of his current salary. At $50k a year that is $4166/mo in gross income. At a max debt to income ratio of probably around 45%, after you take out $800/mo in other obligations, that leaves a principal, interest, tax, and insurance (PITI) payment of $1075 that he would qualify for on his own. At $150k purchase price and 20% down, your mortgage payment probably wouldn't even be $1,000/mo.

Hope this helps, best of luck.

Joshua Lerette - Sales Manager
Carrington Mortgage Services, Inc
Government Loans Down to 580 Credit Scores - FHA, VA, and USDA
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September 10 2013
I was about to say that since you've been there four years and if the employer is willing to explain their hiring practices etc then it is possible. HOWEVER, you said at the end of the year, you're willing and able to look for work when the contract is up. That's where you lost me. If you don't have "gainful employment that's probable and likely to continue" then you very well may have a problem. If the employment is able to continue and you do have plans to continue working there, that's a different story. If you have add'l questions, I'd be happy to help. Best wishes, Kim Lawson, Ohio Licensed Mortgage Loan Originator. Contact and licensing can be found on my profile.
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September 10 2013
Would your husband qualify on his own for a mortgage, not to say that you will not be able to use your contract employment, but would he qualify on his own?

Him going to school would count as employment history. 
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September 10 2013
 
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