Buying a house while DH is activated

iVillage Member
Registered: 04-07-2003
Buying a house while DH is activated
5
Mon, 04-07-2003 - 3:19pm
Hi Ladies

I have a question for any of you ladies that might have been in this situtation.

My DH is in the marine corp reseves and last month he was activated for about a year. In the meantime, we are also on the market to buy our first house.

My question is his Marine Corp pay is very, very, very low compared to his civilian job. I do know that if he was not activated we would qualify (based on our gross income) for the loan since it is a HUGH chuck of change. But since he will be on his marine corp pay for next year's W-2, I don't know if they will take his civilian pay into consideration, and without his civilian pay, we cannot qualify for the mortage loan. On top of that our financial advisor has indicated that the VA-HUD loan would not help us at all-- mainly because the large amount the loan will be.

So my question is did any of you have to go through this? and if so, did your mortage company take the civilian pay into consideration? What have been your experiences.

Thanks

Cindy

Avatar for skisgirl
iVillage Member
Registered: 03-26-2003
Mon, 04-07-2003 - 3:23pm
Hi Cindy,

They should take all income into consideration, I know the VA took not only mine into consideration, but also DH's part time job too.

Just have your paperwork ready, but most importantly, make sure to buy a home you can afford, not just the one you want.

Good luck!

Stacey

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iVillage Member
Registered: 04-02-2003
Mon, 04-07-2003 - 6:50pm
Another thing to consider is talking to a mortgage broker. It doesn't cost anything and they know all the "tricks". We were in the middle of refinancing when my dh was called to active duty from the army reserves and it was great working with a mortgage broker who could work with all the paperwork. The other things to check out are all the allowances and other benefits that kick in once you go from reserve to active duty. When my dh was activated in January, his base pay was lower than his civilian pay (which would have caused a lot of financial troubles). But eventually other things like basic living allowances and such actually gives us more money in the bank.

Sylvie

Avatar for mquin73
iVillage Member
Registered: 03-27-2003
Tue, 04-08-2003 - 10:41am
Hi Cindy! First off welcome. My dh and I were in the process of buying our first house last yr when he got news that his NG unit was being activated. We were told that they would go by his army pay and not his pay from his civilian job, since that was what he would be getting paid at that time. We also were told that we wouldn't have qualified if it wasn't for the fact that dh got a note from him civilian job saying that he would be returning when he returned from his deployment. His orders actually stated that he would be active for no more than 365 days, however, he was only active for 7 mos and then returned to his civilian job when he returned. So, to answer your question, No they will not take the civilian pay into consideration. And also why wouldn't the VA loan help you? That's the type of loan that we got. You need to talk with a mortgage company that does VA loans. We went through USAA. They have a homebuyer-homesellers program (can't remember what it's called now), and they assign you a realtor in your area who helps you search for a house. About a month after you close on the house you will receive a rebate check for going through that program. We got back $400. I can't remember what the stipulations were for that, but it was nice to get some money back.

HTH

Michelle


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iVillage Member
Registered: 03-26-2003
Tue, 04-08-2003 - 12:43pm
Have you checked with your dh's civilian employer about subsidizing the difference in your dh's income. My dh's union pays for any difference in income if he is called to AD. Another W4 in our unit who has been called up is getting a full pay check for the entire year of his tour in Kuwait plus his military income. He works for a fantastic insurance company who completely supports our troops. If that is not a possibility maybe you could show your dh's return orders (if he has a return date) in order to get a loan. Also maybe last years W2 can get you into something more expensive. I do not suggest a VA loan unless that is the only way you can buy a house. I think they charge a percent of the entire loan just for using their service. We had a VA loan with our first house but declined one on our second. If you have excellent credit you will not need the VA to back your loan. If you can't afford the house of your dreams right now maybe you should wait until dh returns. The only risk is the interest rates may go back up (our home loan is at 5.3%) but at least you will have the peace of mind that you can afford it. Good luck, I know this is an excting time!
Avatar for mquin73
iVillage Member
Registered: 03-27-2003
Tue, 04-08-2003 - 1:18pm
I wish all companies subsidized your income while activated, however, most companies do not. It just depends. While dh was activated his company didn't pay him anything, he only got his army pay. Although, they did say this time if he were to get activated that they would pay him at least a portion of his pay while activated. They said this cuz another one of their employees was called up. Kinda sucks for us! lol Wish they would have done that the first time!

Anyway, yes VA does charge a funding fee of 1% or 2% of the loan (can't remember which one), however, that can be rolled into the loan. Also, we didn't pay any closing costs, we had the sellers pay them. The only out of pocket money we had to pay was like $200, and then of course whatever we did to the house, like we repainted 2 of the bedrooms and the basement, bought new door knobs for all the doors and window locks. Nothing major! lol Oh also, you don't have to pay PMI if you don't have the 20% to put down if you go with a VA loan! That was the big thing for us. That can save you alot of money. It was well worth it to pay the funding fee just so we didn't have PMI.

HTH

Michelle


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