What Is A Relocation Loan?

What Is A Relocation Loan?

The Need 

There are some big companies here in Highlands Ranch that are constantly bringing in new employees from around the world.  One of the pains of relocation is what I call "moving twice".  First, you move as a renter or short-term hotel tenant.  Then you actually close escrow and move into your new home.  The wait in between is a royal pain.  Today I want to share with you a great program that allows you to relocate and move right into your new home...before you even start the new job.  The secret is obtaining a relocation loan.

What Is A Relocation Loan?

A relocation loan is a very specific loan for those who are relocating due to a new job.  Typically, when you go to qualify for a loan, you need at least 30 days of paycheck stubs.  Most mortgage companies may require 60 - 90 days.  Well if you are starting a new job in a new location, you don't have those paycheck stubs yet.  So the lender will say, "come back to us when you have your new paycheck stubs so we know you actually have the job and income to support the loan."  The beauty of the relocation loan is this: you can close escrow on your new home, in your new city, as long as the start date of your new job is before the due date of your first mortgage payment.  How sweet is that!  

Example Of How The Loan Works

Let's say that Bill Stats, a data engineer for Lockheed Martin, is taking a new position with the company.  He is moving from Seattle, Washington to Highlands Ranch, Colorado.  Once he has secured an offer letter from Lockheed Martin and accepts the position, he can start the underwriting process for his new home loan.  His new start date with Lockheed Martin is September 1st.  He finds a house that is suitable for his family and closes escrow on August 8th.  No problem.  His first mortgage payment isn't due until October 1st.  He now has 3 weeks to get settled into his new home before he starts work.  What a big advantage.  He doesn't have to rent and he doesn't have to spend a month at the in-laws or a hotel.

 Add "True Qualification" To Get The Home

To compliment this loan, there is also an optional "True Qualification" program.  If you are in a hot seller's market, homes don't stay on the market very long. If you are not at least pre-qualified, you are at a significant disadvantage when making offers on homes.  I've seen higher dollar offers turned down because another lower dollar offer had a buyer who was already fully underwritten and truly "qualified".  With a "True Qualification", you go through complete underwriting and receive a final approval for the loan amount.  The only things pending are: 1) the property address of the purchase; 2) the appraisal;and 3) the purchase contract.  When you make an offer having been through a "True Qualification", you eliminate the variabe that someone could be a stronger financial candidate than you (barring a 100% cash offer).

If you are thinking about moving to Highlands Ranch, I hope this helps.  You should now be able to answer the question, "What is a Relocation Loan?"  If you are being relocated due to a new job, I'd be happy to help you obtain a relocation loan and obtain True Qualification.