Can part time income be counted to qualify?
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 want a maximum combined debt to income ratio of no higher than 40%. For example, if you have a $2,000 monthly gross income, your total monthly bills which includes your mortgage payment cannot exceed $800 in order for you to have a 40% debt to income ratio. Fortunately, I have mortgage lenders that will extend the combined debt to income ratio as much as 56.9% for FHA insured mortgage loans. Fortunately, in a lot of cases, we can use part time income and overtime income to boost the mortgage loan borrower;s monthly income.
Part time income can be used if borrower has two year history
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 borrower;s income.
Part time income needs to be seasoned and likelihood to continue for 3 years
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 year seasoning
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.
High debt to income ratio home loans
If you have high debt to income ratios and need a mortgage loan, please contact me at www.gustancho.com . 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 minimum federal HUD and Fannie Mae mortgage lending guidelines of 56.9% debt to income ratios on FHA Loans.
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