I have put together some information to help assist you in answering some questions about qualifying for a mortgage loan when it comes to your job history and income.
-2 year history of employment unless college/training
recently completed and borrower is employed in field
-Most recent paystub showing 30 days of earnings
-2 yrs W2s
-If working for family owned business tax returns required
-Borrowers who own 25% or more of company are
considered self-employed
-In cases of skilled employment may use letter of hire if
borrower hasn’t started job. Must be guaranteed, nonrevocable,
and start work within 60 days of closing.
Borrow must have sufficient funds for living expenses until
then.
Self-Employed
-Two year history of self-employment
-Two years tax returns + YTD P&L
Commission Income
-Two year history required w/ few exceptions
-If more than 25% of income is from commissions 2 yrs
tax returns required
Part-time Income
-2 yr history req unless stability can be documented
Child Support/Alimony
-12 month history
-Supporting documents
-3 yr continuance (verify ages of children)
-May be grossed up by tax rate used on last yrs tax
return. If not required to file return use 25%.
Bonus Income
-Full two-year-plus average
Car Allowance
-Acceptable but borrower must provide tax returns. Any
car expenses claimed on form 2106 will be deducted from
income.
Overtime
-Two-year-plus average unless employer verifies hours
are required as part of regular work week.
Rental Income from other properties owned
-2 year avg history as per tax returns – use net rents and
add depreciation
-If less than two yr history provide lease and calculate net
rent using HOC vacancy factors
Rental Income from current primary residence
being vacated
-Allowed only in cases of relocation by employer outside
of reasonable commuting distance OR
-Proof of 25% equity in home.
-Requires 1 yr signed lease and underwriter may want
proof of security deposit
-Rental Income to be reduced by HOC vacancy factor
Seasonal/Construction/Trade Income
-2 yr avg history preferred
Boarder Income
-Allowed if boarder is related by blood, marriage or law
and income has been claimed on last 2 years tax returns
Social Security
-Must have likelihood of 3 year continuance
-Award letter and proof of receipt – usually bank stmts
Truck Drivers
-Salary/hourly process as W2 wage earners
-Pd by mile or trip – process as commission income
-Paid by 1099 – process as self-employed
Joel Lobb
Senior Loan Officer
Senior Loan Officer
(NMLS#57916)
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). Mortgage loans only offered in Kentucky.
All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice. Manufactured and mobile homes are not eligible as collateral.
