There are strict rules when it comes to Part-Time Income To Full Time Income Mortgage Guidelines. In order for part-time income to be used, borrowers need two years of consistent part-time income. Besides the two-year seasoning requirement, lenders want to be convinced that the likelihood of the part-time income to continue for the next three years is extremely likely. Lenders will want a written verification of employment from the employer. The employer will be asked if the part-time is likely to continue for the next three years.
How Do Mortgage Underwriters Determine Qualified Income
The ability to repay the new mortgage payment will be a major factor when mortgage underwriters are qualifying borrowers. The income needs cannot be inconsistent or declining in order to be counted. Same with overtime income. In order to for overtime income to be counted as additional income, borrowers need to have had overtime income for the past two years. Mortgage Underwriters need to be convinced the likelihood for overtime income to continue for the next three years is extremely likely.
How Do Mortgage Underwriters Determine Full-Time Income Status Of Borrowers
Borrowers working at least 30 or more hours per week are considered full-time employees. Income can be used as a full-time income. However, a minimum of 30 hours is needed every week in order to be considered full-time income. Lenders will also need written verification of employment stating that the employee is a full-time employee and the likelihood for employment to continue for the next three years is very likely.
In this article, we will discuss and cover how mortgage borrowers can qualify for a mortgage by going from part-time to full-time and how long they need to be employed full-time.
Part-Time Income To Full-Time With Two Jobs At Same Time
There are cases where a mortgage loan applicant has two part-time jobs. Borrowers with two part-time jobs need to have been employed by the two jobs for at least 24 months, or 2 years to be able to use both incomes as qualified income when qualifying for a mortgage. If one of those two jobs has minimum work hours of 30 hours per week, that is considered a full-time job. That job can be used as a full-time job and the other part-time job can be considered a part-time job. Both jobs can be used as qualified income as long as he or she has worked there for a least two years. Verification of employment is required. HR needs to state the employment status of the employee as of whether they are part-time or full-time.
Going From Part-Time Income To Full-Time Wage Earner
Part-time wage earners going from part-time income for the past couple of years and are going to full-time employment and full-time status, the current full-time income can be used to qualify for a mortgage. As long as borrowers had part-time income for the past 24 months, then the part-time income can be used as qualifying income. If a borrower is with the same employer and has changed his work status to a full-time income, there is no seasoning requirement with a full-time job. The full-time income used. The previous wages earned from the part-time job will not be averaged.
How Full-Time Employment Is Determined For Borrowers Going From Part-Time To Full-Time Income
The offer letter of employment and verification of employment from the employer is required. If a borrower had a part-time job and got a new full-time job at another company, the full-time job will count as the main income. The previous part-time job income will not matter and will not be averaged. Only the salary of the new full-time income will be used as qualified income. Borrowers with a full-time job and part-time job at the same time can use both incomes if they have been at both jobs for at least two years. However, if borrowers held a part-time job and had gaps in employment and multiple jobs, they need to have been in a full-time job for at least six months in order for the full-time income to count towards mortgage income qualifications.
Going From Full-Time To Part-Time Or 1099 Income
Borrowers with a full-time job but no longer work full time and changed jobs to a part-time job or are a 1099 wage earner, the part-time income and/or 1099 income can only be used if they have had a two-year employment history. On the flip side, 1099 wage earners who changed jobs to W-2 jobs can qualify for a mortgage loan and new W-2 income can be used. Borrowers need to provide 30 days of paycheck stubs prior to closing the mortgage loan.
December 13, 2021 - 3 min read