Construction Loan Job Change

michihunt

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I was hoping I I could get some feedback from people in the mortgage industry, builders or people with recent experience.

So here’s the situation. We are currently building a new home. I am finishing up on it now and we should move in in 3 weeks or so. I was also offered an awesome job that I was not looking for. I want to take it but don’t want to mess up the loan somehow.

We did an upfront closing on a construction to permanent loan. We did have a difficult time getting approved as we had zero credit (thanks Dave Ramsey!) and my employment situation (9 years at one company with a respectable wage) was a big reason we got financed.

In everyone’s opinion, since we did an upfront closing, am I free to take the new job opportunity without any ramifications? Lateral move wage wise, just a different industry I have a passion for.

Thanks in advance!


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Ben Nicholson

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I've been out of the mortgage industry for 7 years (still in real estate) so this may no longer be the case.

In the past if the new job was the same line of work, and your ratios were the same, or better, you would be fine. You say its a different industry so you might be at risk. The best thing to do is ask your lender if it will mess up the loan. Good luck!
 
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I agree with what Ben said. The industry change might be the issue. When does the construction loan close/convert to the mortgage? Maybe the new employer will be understanding of this timeframe and allow you to keep current job until the loan closes.
 

highside74

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If you did the closing upfront they will roll to the final mortgage with a signature. You already did the hard stuff. We just completed our construction in October and it moved to the 30 year mortgage with nothing more than signatures.
 
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michihunt

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I agree with what Ben said. The industry change might be the issue. When does the construction loan close/convert to the mortgage? Maybe the new employer will be understanding of this timeframe and allow you to keep current job until the loan closes.

The loan will roll into a permanent loan on its own in October. I have spoke to the lender but they have been not helpful. I am apprehensive to outright say I might be taking a new job as this my send them off in the weeds. This is the same lady that made me write a letter stating that I cleared all the trees from the lot and no one was owed for those services at the mere mention that the lot had been cleared prior to looking for a loan.


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Ben Nicholson

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The loan will roll into a permanent loan on its own in October. I have spoke to the lender but they have been not helpful. I am apprehensive to outright say I might be taking a new job as this my send them off in the weeds. This is the same lady that made me write a letter stating that I cleared all the trees from the lot and no one was owed for those services at the mere mention that the lot had been cleared prior to looking for a loan.


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I would double check with the lender to make sure that the underwriter doesn't send out a verification of employment or ask for a current paystub prior to the construction loan turning into your end loan. It seems very odd that they wouldn't do any updated underwriting prior to the end loan. Again, I've been out of the mortgage business for a while, but I did spend 15 years as a lender so I've done my share of construction loans in my day. Obviously some loan programs/underwriting have changed so you might be fine, I would just check again if it were me. Are you using a local lender or a national company?
 
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GotDraw?

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@michihunt

Have a friend call them as a Stalking Horse... he can tell the loan officer that he's had a stable job for 10 years and needs a construction to permanent loan. Then during the discussion, mention that he is considering several job offers that may come through during construction phase and that he'd like to know the impact on permanent closing if the job pays as much or more than his present job.

Let your friend get the facts w/o you tipping your hand.

JL
 

loadsandlattes

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I work for a large home builder in Texas and have a little experience here. I'm also in the process of buying a new home and under contract. We are about 28 days out from closing and underwriters just did employment verification.

My wife is a doctor and still has about $100,000 of student debt that we are wanting to clear off with cash on hand before we move into the new home, so I asked lender if we could go ahead and do that. We are way under 20% DTI and I didn't figure it would be a problem, but our lender said that we could expect the underwriters to do another Verification of Employment and soft pull before closing and recommended we wait until after.

Have you spoken to your new employer about potentially waiting to start you after you close?
 

highside74

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You did the closing upfront. Their is nothing they could do that could change the fact that closing is done. You have a schedule to keep and if you miss it you will likely pay a penalty but other than that finish the house and sign your conversation document and move in.
 

Justinjs

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I've also been out of the mortgage game for a few years. I agree with Ben.

Call your lender and ask. Holy crap if you're actually taking mortgage advice from a hunting forum. ASK YOUR LENDER.
 
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I didn’t underwrite construction loans, but with conventional and typical government home loans, a verification of employment is performed towards the beginning of the loan process and again right before closing.

While it may not kill the loan getting a different job while the loan is being worked, you may have to submit new documents like your first paystub which could delay closing.


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Currently do mortgages as part of my job. . . The answer really is "it depends". Where you did an upfront closing, and you're only doing the conversion they may note reverify employment, it varies by provider.

You absolutely have to talk to your lender. Just tell them you have a job offer and want to know if it is something you can take now, or something you need to wait on. They should understand and give you the answer you need. Also like others have said, talk to the one looking to hire and see if they can take you after everything closes.

You can quit the day after you close. . . Not the day of, if they are going to reverify but the day after! Had a guy lose a house deal because he bought a truck the day of his closing. . . Threw his ratio over the limit and underwriting denied the loan closing. . . It was a total cluster!
 

billinaz

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Currently do mortgages as part of my job. . . The answer really is "it depends". Where you did an upfront closing, and you're only doing the conversion they may note reverify employment, it varies by provider.

You absolutely have to talk to your lender. Just tell them you have a job offer and want to know if it is something you can take now, or something you need to wait on. They should understand and give you the answer you need. Also like others have said, talk to the one looking to hire and see if they can take you after everything closes.

You can quit the day after you close. . . Not the day of, if they are going to reverify but the day after! Had a guy lose a house deal because he bought a truck the day of his closing. . . Threw his ratio over the limit and underwriting denied the loan closing. . . It was a total cluster!
So if I read this right.... If you do a Construction to Perm loan with a one time up front closing and the loan closes in 45 days if you were to quit your job the next day the construction proceeds and the loan automatically changes to a regular mortgage without any required statement or verification of income?

Im actually looking into this and your inside knowledge would be most helpful.
 

WRM

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I used to close const/perm loans for multiple lenders. "It depends" is the best phrase written here. Any given mortgagor (or individual employee) can get hinky without prior notice.

So, as noted, try to delay your start date. Or, be upfront with the lender. Or, turn job down and hope it comes back. Or roll dem bones!
 

billinaz

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I posed this question to a bank I am looking at. I asked what would happen is the day after the loan closes (up front) if we both lost our jobs.

I was told we would still be responsible for the full amount of the loan when it closed. And at the end of the 12th month, it would automatically convert to a 29 year mortgage.
 

JBrew

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If you're dealing with a broker, ask your originator to get ahold of the Acct Executive and ask them. If you're dealing in-house, your answer should come from within. As others have said...it depends.
 
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