Qualifying For Mortgage With Part-Time Jobs Mortgage Guidelines
This article covers Qualifying For Mortgage With Part-Time Jobs Mortgage Guidelines
Qualifying For Mortgage With Part-Time Jobs:
The Great Recession And Real Estate And Credit Meltdown Of 2008 was the worst economic disaster since the Great Depression where it affected millions of families. Whole business industries were wiped out and eliminated such as the sub-prime mortgage markets and the whole mortgage and real estate industry went through a total overhaul. Bankruptcy and Foreclosure soared to historic levels and thousands of business owners went out of business.
Millions of Americans lost their jobs, jobs where they had for decades, and felt secure. Homeowners saw their home equity evaporate before their eyes where their mortgage loan balance was greater than the value of their home. Many could no longer afford their mortgage payments because of business loss, reduction of wages, or job loss where they were forced to file bankruptcy, go through foreclosure, go through a deed in lieu of foreclosure, or go through a short sale.
With the election of a new President, Barack Obama, many new laws were passed and one of those laws was the health care reform act. This health care law mandates employers with 50 or more full-time employees to require health insurance for their employees. This was a major disaster in the job market. This is because thousands of employers cut off full-time employees and made them part-time employees. Barack Obama, a community activist in the South Side of Chicago prior to becoming President of the United States, had no experience in business or had any management experience and meant well. However, it fired back to the citizens of this country.
Having Multiple Part-Time Jobs Versus One Full-Time Job
Finding a full-time job, which was rather easy to get in the past prior to Barack Obama, was next to impossible and is still very difficult to this day. Most employers hire two part-time employees rather than one full-time employee. This is because it is cheaper and saves the company money. Many Americans work multiple part-time jobs to make ends meet. Qualifying For Mortgage With Part-Time Jobs is allowed. However, there are restrictions and rules in qualifying for a mortgage with part-time jobs which we will cover in this mortgage blog article.
Requirements In Qualifying For Mortgage With Part-Time Jobs
Qualifying For Mortgage With Part-Time Jobs requires that the mortgage applicant has been with part-time employment for at least two years.
- Borrowers can have more than one part-time job
- Multiple part-time jobs are allowed as long as borrowers have worked on each part-time job for at least two years
Part-time income will be averaged by the mortgage underwriter of the past two years. However, if part-time income is declining from one year to another, then the mortgage underwriter has discretion on either using the most recent year’s part-time income (the lesser of the two years). Or if the declining part-time income is significant, then the mortgage underwriter may not count the part-time income at all. Declining part-time income is not viewed favorably and the future earnings potential from the part-time job is questionable.
Qualifying For Mortgage With Part-Time Jobs When Going From Part-Time To Full-Time Status
There are many cases where part-time employees become full-time employees.
- With situations where a part-time employee goes to full-time employee status, then the full-time income is analyzed and not averaged
- The mortgage lender will need written verification of employment which is a form the employer needs to complete certifying that the employee is a full-time employee and the breakdown of the wages
- The new full-time income will be used for qualifying purposes and the past two years part-time income will not be averaged
- If the part-time employee went to a full-time employee as a salaried employee, then the annual salary will be used for income qualification purposes
- If the part-time employee went to full-time status working 40 hours per week, then the 40-hour hourly rate will be used for income qualification
The full-time employment status needs to likely continue for the next three years. 30 days of paycheck stubs will be required prior to closing on the mortgage loan.
Lender Overlays In Qualifying For Mortgage From Going Part-Time To Full-Time Status
If you are told that you do not qualify for a mortgage loan and need to wait two years if you went from part-time employee status to full-time employment status, then please call us at GCA Mortgage Group at 262-716-8151 or text us for a faster response. Or email us at [email protected] Many mortgage lenders have mortgage lender overlays with employment longevity where they will not accept anyone who was not on the same full-time job for at least two years. Mortgage Lending Guidelines do not require that a borrower be employed with the same employer for two years. This is up to the individual mortgage lender and is a mortgage lender overlay, which are additional guidelines imposed by individual lenders on top of the federal minimum mortgage lending requirements.