Income In Mortgage Qualification

Income In Mortgage Qualification

Gustan Cho Associates

Part Time To Full Time Income In Mortgage Qualification:

Income in mortgage qualification is the most important factor in qualifying for a mortgage in 2015.  You can have prior bad credit, collection accounts, charge offs, bankruptcy, foreclosure, deed in lieu of foreclosure, short sales, low credit scores and still qualify for a mortgage but you you cannot qualify for mortgage if you cannot document income.  Income is kind of tricky when it comes to qualifying for a mortgage.  There are certain ways mortgage underwriters qualify income for a mortgage loan applicant.  Not all mortgage companies qualify income the same way.  Both HUD and Fannie Mae and Freddie Mac have their own guidelines when it comes to qualifying income and each mortgage lender can have their own set of guidelines when it comes to qualifying income.  Yet, within a particular mortgage company, each individual mortgage underwriter may use underwriter’s discretion in qualifying income for a particular mortgage loan applicant.

W-2 Income In Mortgage Qualification: Salary And Hourly

Salary and hourly income wage earners are the easiest and simplist to qualify when it comes to qualifying for income for mortgage qualification.  The easiest borrower to qualify when it comes to income for mortgage qualification is when a mortgage loan applicant makes a certain amount a hour, works 40 hours per week and has been in their current job for 2 years.  Same with salary income wage earners where they make a certain salary and have been on their job for at least two years as a full time salary wage earner.

Part Time Income When It Comes To Income In Mortgage Qualification

You can be a part time wage earner and use that part time income in mortgage qualification as long as you have been in your part time job for at least two years.  There are workers who do not have full time jobs and have two or mortgage part time jobs.  You can use all of your part time job wages as long as you have been a part time wage earner for at least two consecutive years.  You cannot use the part time income or multiple part time income if you had not been employed as a part time wage earner for at least two years.

Overtime And Bonus Income In Mortgage Qualification

Overtime and bonus income can be used to qualify for mortgage as long as the wage earner has had a history of earning overtime income and bonus income for at least two years and the verification of employment from the employer states that the overtime and bonus income will continue for the next three years.

Social Security Income, Pension Income, Disability Income

Social security income, pension income, and disability income can all be used for mortgage qualification and many times can be grossed up to 25%.

Self employment income

If you are a business owner, you can qualify for a mortgage as long as you provide the mortgage lender two years tax returns.  Self employment income mortgage loan borrowers often times have a difficult time when qualifying for a mortgage due to the many writeoffs.  Only the adjusted gross income will be used when qualifying income for self employment income mortgage loan borrowers.

Commission income paid via W-2

If you are a 1099 wage earner or a commission income wage earner such as a mortgage broker, mortgage banker, real estate agent, car salesman, or sales person, you need a two year employment history even though you get paid from your employer with a W-2.  Mortgage underwriters will pay special attention on whether or not these wage earner mortgage loan borrowers have steady income in the past two years.  If they had increasing income or steady income for the past two years, both years income with be averaged.  If the commission income wage earner had declining income, the most recent declined income will be used and the 12 month average of that year will be used for income mortgage qualification.

Part time to full time income in mortgage qualification

There are special regulations when it comes to part time to full time income in mortgage qualification.  If you have been a part time employee or temporary employee with an employer and went from part time status to full time status with the same employer recently, mortgage lenders like myself will go off the full time income as long as you can get a written verification of employment stating this fact.  We will not average your part time income to your full time income.  We will just go off your full time income as long as you can provide 30 days of pay check stubs.  You need to be careful on which mortgage lender you choose.  Depending on the mortgage lender, many mortgage lenders will average you part time income and you full time income for the past 24 months.  Many times this will create a short fall when it comes to mortgage qualification.

Gaps in employment in mortgage qualification

You can have gaps in employment in the past two years and still qualify for a mortgage loan.  If you had more than a 6 month gap in employment, you need to work for at least six month on your current full time job in order for you to qualify for a mortgage loan.  If you had six months or less in gap in employment, you will qualify for a mortgage right aways as long as you have obtained full time employment with a written verification of employment.  You just need 30 days of paycheck stubs in order to close on your home loan.

Related> Can you qualify for mortgage with gaps in employment?

Related> Can you qualify for mortgage with multiple jobs in past 2 years?

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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