There are different proofs of income we can use to qualify you for a mortgage if your job or situation doesn’t allow you to prove a documented employment history of at least two years.
When qualifying for a mortgage, the single biggest factor lenders look for is a documented employment history of at least two years.
If you’re a recently graduated college student and you’re worried you won’t qualify because you don’t have a long enough employment documentation history, the good news is we can use your diploma, your transcripts, or an offer letter from your new employer to structure your loan and position you for a pre-approval.
All we’d need in this case is a pay stub from your first two weeks of employment as a prior funding condition and another pay stub as a post-funding condition. So basically, we’d need 30 days’ worth of income to confirm you took the job.
Another instance where we typically see this perceived lack-of-documentation issue come into play is with school teachers. Oftentimes, teachers move from one district to another at the end of the school year. This means if they’re trying to buy a house in July but the school year doesn’t start until August, technically they’re not employed.
In this case, we can use the teacher’s offer letter or signed contract with the new school to close the loan. Once the school year starts, we can then collect your pay stubs.
If the job you have or the job you’re taking is commission-based or the majority of the income is bonus-based, in order to use those incomes, we’ll need to see a two-year history of the same employer providing the commission or bonus. If that commission or bonus is 25% of your gross base, we’ll also need two years’ worth of tax returns just to confirm that there are no write-offs for unreimbursed expenses.
If you have any more questions eligible income and what you need to qualify for a mortgage, don’t hesitate to call or email us anytime. We’d be glad to help you.