Employees
- Two years of employment history is generally required. Sometimes borrowers may have gaps in employment due to job loss or illness or other reasons. This is a case-by-case scenario and can be handled if the reasons are legitimate.
- Gross income is traditionally averaged over the last two years. However, if a borrower has a salary, the current salary can be used as income if it is based on the growth achieved by the borrower. Similarly, if a borrower is hourly and the hourly wage has increased, the new hourly wage can be used if the borrower works full time and the hourly increase is based on growth achieved by the borrower.
- Bonuses, overtime, and other allowances are typically averaged over two years.
- Income from part-time jobs is acceptable only if the borrower has been at work for the past 2 years.
- Income such as alimony, social security, pension, disability, foster care, etc. they will be included in borrowers’ income if they are expected to be received within the next 2 years.
Free-lancers
Only adjusted gross income (after deducting all expenses) is considered. In general, some people misunderstand this and try to use gross income. That is not allowed. Income is considered after deducting expenses from gross income. This is basically your taxable income from the business. However, non-cash charges such as depreciation can be added back to your taxable income, increasing borrowers’ income.
It is essential to have the business in operation for two years. Revenues will be averaged over two years.
Prospective homebuyers should read articles on qualifying home loans for sale, FHA home loans, VA home loans, USDA home loans, and conventional home loans.
Additionally, potential homebuyers should read up on specific cities that interest them, on the following:
- Homes For Sale For MLS Search,
- Bank REO / Short Sale Search
- Foreclosure Search (Outside MLS)
- Newly Listed Properties
- Rent Properties (1-4 units)
- Condo searches
- New Construction Homes