Mortgage Qualifying With Part Time Income And Overtime Income

This BLOG On Mortgage Qualifying With Part Time Income And Overtime Income Was UPDATED On June 26, 2017

One of the biggest hurdles many mortgage loan borrowers face is having a high debt to income ratio when qualifying for a mortgage loan.

  • Most lenders have overlays on debt to income ratios.
  • Lender overlays are lending requirements that are higher standards than those imposed by HUD, the parent of FHA.
  • For example, borrowers who have a $2,000 monthly gross income, total monthly bills which includes mortgage payment cannot exceed $800 with a lender who has lender overlays capped at 40% debt to income ratio. 
  • HUD Guidelines On Debt To Income ratios is 46.9% DTI front end, and 56.9% back end to get an approve/eligible per Automated Underwriting System for FHA insured mortgage loans. 
  • Part time income and overtime income can be used to boost the mortgage loan borrowers monthly income if borrowers had a two year seasoning.

Mortgage Qualifying With Part Time Income Can Be Used With 2 Year Seasoning

Having a high debt to income ratio can disqualify a mortgage loan borrower in getting a mortgage approval.

  • Many mortgage loan borrowers have part time income and are paid in cash. 
  • Unfortunately, undocumented part time income cannot be used in a mortgage application. 
  • Only documented part time income with longevity can be used to calculate the mortgage loan borrowers income.

Part Time And Other Income Likelihood Of Continuation

To be able to use part time income for mortgage qualification purposes, the mortgage borrower must have had the part time income for at least two years.

  • It is the same case with overtime income. 
  • If the mortgage loan borrower has had two years of consistent overtime income, we can use the overtime income as additional monthly gross income to offset the high debt to income ratios. 
  • In order to use part time income, the mortgage loan borrower needs to have worked for at least two years.

 Part Time Income With Less Than 2 Years

If the mortgage loan borrower has worked his part time job for less than two years, we can probably still get to use the part time income if the mortgage loan borrower can get a letter from his or her human resources department stating that he or she will be guaranteed the same amount of hours in the next six to twelve months.

  • The same apply to overtime income. 
  • If a mortgage loan borrower has had overtime income for less than two years, they need to get a letter from their personnel department that the overtime is likely to continue for the next six to twelve months.

Overlays On Debt To Income Ratio

Borrowers high debt to income ratios and need to qualify for a mortgage,  please contact us at 1-800-900-8569 or email us at  We are mortgage bankers and correspondent mortgage lenders with no lender overlays. Most mortgage companies have debt to income ratio caps at 45% due to their lender overlays, however, we only go by AUS FINDINGS and minimum federal HUD and Fannie Mae mortgage lending guidelines of  46.9%/56.9% debt to income ratios on FHA Loans.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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