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Did you recently change jobs or receive a promotion? Despite what you might have heard, it is still possible to qualify for a mortgage to buy or refinance a home using your new income. The lending atmosphere is rife with misconceptions about job gaps, job changes and occupational changes within the course of an employment time frame. You can get a mortgage if you switched jobs or even changed industries, you just have to approach it the right way to seal the deal.

When determining your ability to pay (and therefore determining how much house you can afford), a lender will calculate your average income based on your pay from the past 24 months. It’s pretty straightforward if you’ve had the same job and same income and pay structure, but if any of those things changed in the past two years — or will change soon, you may face challenges when trying to get a mortgage.

In the past, lenders were ready to strike down loan applications in which there was a job or an industry change. Even real estate professionals will tell you not to change jobs before applying for a home loan. While that very well may be the case for most situations, it is not necessarily so black-and-white.

If you have had a job change, no matter what, a lender is going to need the following things from you — and your employer — in order to close on a mortgage: an offer letter, a role change letter if you have a title change and commensurate compensation package change, and the most recent pay stub and verification of employment.

How Lenders View Hourly Employees

Hourly employees are under the tightest microscope when it comes to getting a mortgage. Why? An hourly employee may have a set full-time schedule, which is ideal for lending purposes. However, if you work slightly less than a full-time schedule, with hours that fluctuate from week to week, this can muddy the waters.

The income gets averaged as long as you’ve been an hourly employee — even if you’re making more money now on a per-hour basis. That’s right, if you were making $40 an hour, and now you earn $50 per hour, the averaged income during the past 24 months – including the lower wage — would apply. So what can you do to get the higher hourly rate factored in to your ability-to-pay calculation?

Here’s what you’ll need from your employer: An offer letter, a current pay sub and a detailed description of the compensation structure with a new employer. These items could get you an exception due to relocation or an alternative circumstance. In either capacity, a most recent verification of employment can bridge the gap between how many hours worked in the year to date, supporting the new federal ability-to-repay requirements.

How Lenders View Salaried Employees

Lenders love salaried employees the most because a set salary streamlines the income calculation in the qualifying process. If you’re changing from one salaried role to another salaried role, despite a job gap, this should be no problem for qualifying for a mortgage so long as you can explain any gaps in the most recent 24 months.

Each job you’ve held in the past 24 months — even if you’ve held multiple jobs — all have to be detailed and itemized with dates so there is no gap in employment. If there is a gap in employment, the lender will need a written explanation detailing the transition. If you have changed jobs from one salaried role to another salaried role, with a different title and a different position — even within a different industry — that still should be fine for your lender as long as you are paid the same way — a flat salaried income.

What If You’re Salaried With Overtime, Commissions or Bonuses?

Have a new job? Or a new salaried role with big commissions, overtime or bonuses? If you do not have a history of this additional add-on income, it cannot be counted for use when qualifying for a new loan.

Here’s an example of a transition that a lender will find acceptable when calculating average income: A police officer has earned overtime plus salary for the past 24 months, and decides to change jobs to become firefighter with overtime potential. In this case, the overtime will be included in the 24-month average. The overtime, bonuses or commissions must be consistent during that time period for that type of income to be included in the average. A borrower can’t have a history of overtime, then change jobs and now have add-on commission income and expect the lender to include the add-on income in the 24-month average when there is no prior history of it.

Changing From Salary to Hourly Pay

If you are moving from a salary role to an hourly role, the lender is going to have to use your hourly income supported with a pay stub and verification of employment. As long as the change is within the same field and your title and role are similar, you should be in the clear.

Future Promotion or Raise On Deck

Congratulations, you’ve been offered a promotion! But first: Has it actually occurred yet? If not, you will be hard-pressed to get the lender to use the projected income, even if it is guaranteed.

If you cannot provide a pay stub with year-to-date income (usually a 30-day pay stub depending on your specific lender requirement), along with a letter detailing the change, you won’t get approved for the loan. Let’s say, for example, you are searching for the house and you know in the next four months your income is going to increase to $6,000 per month because you’ll have a new role within your company. In order for that $6,000 per month income to be used in the calculation, you’d have to get the details of the raise, including the role change letter and at least one pay stub.

So if you are thinking about getting a mortgage, even if it is further down the road, consider opening a dialogue with a lender now so you can be guided through any income bumps the past or future may hold. It is especially critical for homebuyers to get pre-approved with a lender upfront prior to house-hunting. This process includes allowing a lender to review your credit, debt, income and assets to assess your ability to qualify.

This is also a good time to start looking over your credit reports and checking your credit scores so you can address any problems in advance of applying for a mortgage. (You can check your credit reports for free once a year, and there are services that allow you to check your credit scores for free, like Credit.com.)

More on Mortgages and Homebuying:

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  • http://fireflyvoip.com Alan Jurysta

    Great article. Question – how do lenders view individuals transitioning from self-employment to w-2 employment? The question that gets asked is are you in the same industry? What are the lenders looking for?


    • Jeanine Skowronski

      Usually the move will not pose a problem if it’s in the same industry.



  • Gg

    I have a steady job at 60k but will be moving to a new job in the same line of work for more pay and opportunity in the next month. Im looking to buy a house in the next 4 to 8 months. Should I get a mortgage rate now that I’m with the old company that I’ve been with for 2 years or wait till I’m at the new company? I’m a first time homebuyer and graduated from university 2 years ago.

  • Jeanine Skowronski

    Lenders can have stringent underwriting requirements when it comes to employment, but, at the end of the day, whether you can still get a loan in this situation is going to be widely influenced by your debt-to-income ratio and how much money you are putting down. You can also try looking FHA loans, which have less stringent underwriting requirements when it comes to employment situations. You can more info about FHA loans here:




  • Dale Gribble

    I had worked in upstream oil and gas for just over three years until I was laid off in February. I start another salaried position for an electricity company on Wednesday. My brother and I want to buy a house, and I’m eager to move out of my garage apartment. Should we wait to apply for a home loan?

  • John Epperson

    I was told by someone from lending tree that 6 months job history was the requirement. Because we moved 7 months ago there was a gap in employment. I have a 730-750 & my wife has a 645. Also, we still own our old house with $30k equity with renters. That home loan isn’t on our credit (personal loan.) My wife has 7 months work history. I only have 2. Virtually debt free on paper. Could we get approved now, or do we have to wait?

  • Lauren A

    I went from 12/hr to 70k. I started in Dec 2014 and am looking at buying in April 2016. Roughly a yr and a half with current job at 70k. Credit was in 700s but had cancer and mounds of medical bills so my utilization was at one point 99%. I have always been current on my cc payments. I will be at 0% utilization in Dec 2015. When I pay off my cc and get my score back from 550 to 670 will I be eligible for a loan? Two factors I know are an issue. Carrying that high utilization from 3/2015 til 12/2015 and my drastic pay and becoming a salaried employee making 10x what I did the last year. Thanks

    • http://www.credit.com/ Credit.com Credit Experts

      Talk to a lender and ask. But credit scores stop being penalized for high utilization just as soon as you bring the utilization down, so it should not hurt you in April. You can get two free credit scores, along with an explanation of the factors that make them what they are and a personalized guide for improvement from Credit.com. It updates monthly, so you should be able to see the effect of bringing down the utilization. It counts as 30% of your score, so the effect is likely to be dramatic.

  • Melissa

    I am trying to gauge when I will be able to qualify for a mortgage. I went through a rough divorce and my ex just decided to stop paying. My income dropped drastically because my settlement of $90,000 ceased. In a nutshell he bankrupted the company and I lost my settlement. I have been employed for 1 1/2 years making $140,000 and my new husband makes $50,000. Unfortunately I had to file Chapter 13 and my home was foreclosed. I am current on payments for Chapter 13 and make well enough for a new home and have re-established my credit. It is now 720. What do you suggest?

    • http://www.credit.com/ Credit.com Credit Experts

      Talk to a mortgage broker about your situation and your options.

  • Joe

    I just got a new and better paying salaried job, it is in the same field as the last one. Can I use my new income to get a loan based on this income? Thanks

    • http://blog.credit.com/ Kali Geldis

      Hi Joe —

      You can use the new income, but it will need to be documented. Your best bet is to talk to a mortgage loan officer at your bank about what you’ll need to provide. You can go in and chat with a loan officer without having to get a credit pull — explain your situation and they’ll have tips for you on what you’ll need to provide.

  • Stacy Swart-Davis

    I was wanting to know if my husband and I would qualify for a loan. We both work however I just got my job in June and my husband got his in August. I have been consistently employed though for more than five years but took a job offering more money and mine is salary. We make $43000 a year and our credit is excellent about 720 I have a little bit of student debt bou only about $12000.

  • Linda

    Can you purchase a home without a job, but has good credit score?

    • http://www.credit.com/ Credit.com Credit Experts

      Purchase, probably yes. But you might not be able to finance one. The lender will want to make sure you have the means to pay back any loan.

  • Frustrated!

    Looking for ideas. Hubby just started a new job…2 months on the job after a 1 year certification for HVAC. He doesn’t get paid hourly, but paid by the job. He is in HVAC in Florida btw. The only time he gets hourly ($12) in vacation and training. I have $722 per month in child support, and I am a full time student with student loans in deferment. We have decent credit..both in mid to high 600s. We also have a 20% downpayment (40k-45k). We had someone look through our info and we was told we couldn’t qualify for any mortgages. We recently paid off our credit cards (less than 12k). The only debt we currently have is rent, and a car payment. Is it truly hopeless for us to be homeowners?

  • Vicki

    My son and his girlfriend just got their first jobs out of college and now they are talking about buying a townhouse or a condo in Denver, CO. Will they be able to qualify for a mortgage just starting out?

    • http://www.credit.com/ Credit.com Credit Experts

      Only a mortgage broker could answer that with certainty. And it could depend on their credit histories . . . if they have had credit cards in their own names, car loans, student loans, etc., and also their debt-to-income ratios and more. The formulas are not simple. It will depend on how much they want to borrow, their credit history, their income and their other monthly obligations.

    • ScottSheldonCaliforniaLender

      Credit scores will absolutely be a factor but, assuming a credit scores are good if the main question here was a brand-new job- then the answer is yes in most circumstances. The best possible outcome would be them securing a job in their specific field of study or a similar field. The college education can be used in lieu of 2 yr work history as long as there are transcripts documenting full-time student status. Lender would need an offer letter for the job as well as a paystub to support the new employment.

  • http://www.Credit.com/ Gerri Detweiler

    I’m sorry but our expertise is in credit matters in the US not the UK.

  • Gia Weyler

    My husband may have a big job opportunity soon. His pay would increase, dramatically. We can already afford the payments on a house but he really wants this job. We are wanting to a buy a house sometime next year. Do you think it’d be ok if he switched jobs if the pay is higher? Would we still be able to get a house?

    • ScottSheldonLoans

      If possible it would be more optimal to do it with the job that is currently on the books rather than making a change as that is a risk you guys would take pursuing it.

  • Ahmed Aziz

    Hi, I just came to USA in Feb 2014, and doing same Fixed salary job since Feb 2014 till now. As per my research I will not qualify for mortgage because they need me to spend 24 months at job? Is it state law or it varies by lender.

  • Anonymous

    I am on a loan for a house with my parents. The thing is I found a better job and the job I am currently at treats employees poorly and I am on the verge of getting fired because of a situation where they are in the wrong for. I start the better job soon. How does this effect the loan? We are very close to getting it, within the next 2 weeks.

    • ScottSheldonLoans

      If you are currently on a mortgage loan with your folks, the fact that you changed jobs has no bearing on that. If you are in the process of getting a new job while in the process of getting a mortgage, get the loan closed first.

  • bob volter

    Hello, I’ve been in my job for the past 17 years, but for some reasons I’ve got an offer for a job that i went to school for, but ii’s paying me less and i’m trying to get a house next year,so what should I do? I’m thinking about keeping both jobs though.

    • ScottSheldonLoans

      Buy the home consistent with the income next year, or buy a house this year. The second job probably will not count for income qualifying, but could be a good vehicle to continue to help you save for a downpayment. I would keep both jobs right up until when you close escrow even though the first job is the one that will be counted since it pays you more and you have a history of it. The second job can not be counted because there is no 24 month history or so it appears.

  • vinny

    I am in the first home club and have an hourly job that qualified me. I also just finished school for barbering and a barber wants me to work for him in a very popular shop. If he pays me comission which still gets me a w-2 at the end of the year will this effect me finishing the program in 8 months?

    Thank you.

    • ScottSheldonLoans

      Vinny can you please clarify? I’m not sure exactly what your question is.

  • ScottSheldonLoans

    Anytime….there is no waiting time frame.

  • Mary

    My husband and I are looking to purchase a home. He works construction and work varies (has been with the same company for 1.5 years), but he has been in the military for the last 12 years (last 5 years in the reserves). I recently relocate back to our home town approx. 9 months ago, where he has been working. What are our chances in getting approved? We want to try for a VA loan, but concerned with his break in work due to projects and since I only been at my position 9 months.

    • ScottSheldonLoans

      I would apply. VA is very forgiving on income history as long as you have current, and solid income moving forward.

  • Kristy Sonerson

    What if you were disabled last year? My husbands hip replacement broke. Literally snapped in half. He had metal poisoning and had his femur broken all the way down…he was out of work from June until December last year. He is all fixed and back to work now and he finished school online while he was off. He still has his same job he has had for the last 3 years but he also got a new job in his field. He plans to keep both jobs until he has worked his way up in the new field. So how will our income be determined?

    • ScottSheldonLoans

      More than likely, his same current job will be used. The second job could be used generally if it has been in existence for the last two years or if he has had a history of working two job concurrently in the past.

  • Zenchic

    Great info! For our specific situation I am still confused on one thing. My husband and I both want to be on our next home loan together. He for the last few years has been self-employed, having his own construction businesses and currently works for a construction company as an employee, but is 1099’d, so technically still self employed. We are moving to Alaska and he will get a W2-employee construction job there, so my question to you is will he still have to show his previous 2 years of tax returns along with one W2 paycheck or will he just have to show one W2 paycheck without the tax returns?

    On a side note, I would be taking my job with me to Alaska, as I work from home and have been at the same company for 7 years as an hourly employee (hourly base pay, Production incentives, shift differential, etc).

    Also, would lenders need to see one W2 paycheck stub from him or one month’s with (two stubs)? I’ve read that online somewhere you need at least a month’s worth but I’ve also seen just one is needed so I am confused on that.

    Thanks for any help!

    • ScottSheldonLoans

      You will want to provide the two years of tax returns anyway. As for documenting a new job? This can be accomplished with our most recent pay stub and an offer letter. Some mortgage companies however, require an employee to be on the job for 30 days with a full 30 day pay stubs and an offer letter, so check around with lenders in your area. Good luck on the big move!

      • zenchic

        Thanks Scott! This info really helps us out. 🙂

  • Marco

    Hi how is it going. I have been with the same company for about 4 years now! The first 3 years I was only working 20 hours a week. The last year I worked full time. This year I got a pretty good promotion. I already got pre approved. Will I have a problem getting a final approval?

    • http://www.credit.com/ Credit.com Credit Experts

      While we can’t predict the future with any certainty, it seems likely, assuming your financial picture hasn’t changed much.

    • ScottSheldonLoans

      You should not have a problem trying to get a mortgage. The mortgage company will want to get a verification of employment upfront anyway which will very easily spell out your hours for income qualifying purposes.

  • lala

    Hi, My husband and I left our jobs 2 years ago, we rented our house and move across the country. We started a new business but the first 18 months we didn’t have any profit because we were investing in building our business. We started doing well for the last 3 month after January and February vacation. I have 800+ FICO score but when I tried to get pre approved they rejected us when they saw our last two years taxes. Is there a way to get pre approved for a home loan?


    • ScottSheldonLoans

      Generally, lenders want 2 years of tax returns for self-employed borrowers. I would recommend talking to a local credit union, or smaller bank in your area who might have alternative options.

  • ScottSheldonLoans

    If I am understanding you correctly, the other house was solely 100% in your name and not in your husbands at all, right? You Should be able to provide a letter of explanation detailing the job gap. If this is the only thing preventing you from getting officially preapproved I believe you have a good shot.

  • unhappy lady

    I recently changed jobs. I am very unhappy in my new position and would love to get out of it. The problem is I am about 1.5 weeks away from closing on a house. How long do I have to stay at this position before I can switch and be happy again?

    • ScottSheldonLoans

      Sorry to hear that. Close escrow. THEN its open game.

  • TommyN

    Hi Scott,
    My wife has been working part time (25 hours/week on W2) for 1 year. Can her income be counted along with my income for a mortgage or she has to work for another year to be eligible? I’m working fulltime for the past 2 years and in salaried. I want to count her income in because our gross income would be higher in order to afford a higher priced home.

    • ScottSheldonLoans

      Hi Tommy,
      It sounds like her income would be eligible. What was she doing before? Is it the same field, same role, same capacity?

      • TommyN

        She has only been in the US for 3 years and it was her first job ever in the US. She worked in a different field at her original country.

  • kcope

    I have a question what if you go from salary to contractor, with the same company? I was let go with my company of 13yrs. (they were bought) with a sev comp package. Then I’ve been hired back on by a consultant agency and the hourly rate is higher. Will I still be able to purchase a home.

    • ScottSheldonLoans

      Unless your employer makes you w2 again, the answer is no. Here’s why …two years of tax returns- are required for self-employed borrowers including borrowers who are 1099-same thing by the way. If you have been self-employed and then you immediately jump to becoming a W-2 wage earner, generally, you can use your current W-2 wages immediately without having to wait any period of time. Just pay stub with an offer letter. When you go from being W-2, to being self-employed that’s going to be an issue if your intentions are purchasing a home within the next two years. Alternatively, pursuing getting another W-2 job could work.

  • Jeff


    I am trying to get a mortgage at the end of the summer. I have been with the same company for 4 years and am paid on a job rate, not hourly or salary. Last year’s gross was around 72k.

    I have been offered a position with a different company, different field and is hourly. Starting pay is just under 26 an hour with full pay around 32 an hour after 6 months with time and a half ot.

    I am changing jobs because the pay will be more regular and not so up and down and the new job is Monday through Friday and no out of town work. I spend half of my nights in a hotel in my current job, this is difficult with a wife and kids.

    The new job is definitely a good move but I am worried this will stop me from getting approved for a mortgage.

    My credit score is mid 600’s and I want to use the va loan. We are waiting until the end of summer to get a credit card down to help with my credit score.

    My wife has been with the same company for 2 years but is only part time.

    Are there lenders that will offer me a mortgage with my career move?

    • ScottSheldonLoans

      Jeff thanks for the post. Government loans are more foroving on the job changes. More than likely your hourly without ot would be consdered. There doesn’t appear to be a history of ot hence lender mot being able to use it to qualify. I would connect with a lender in your area now to get a more concrete prequal. This does sound like it would pass.

  • Maria

    Hi Scott me and boyfriend are planing to purchase a home but I’m worried I wont be able to qualify for a mortgage I have 2 years with the company I work currently in but I get paid per piece which changes my income its never below 1200 its usually well above that but I’ve been told this may be a problem I could ask to get paid salary but I don’t know how will a bank look at this and also I might be getting paid less what I would usually be getting paid if I do try and get salary but i will be willing to do it if it ends up getting us a bigger chance in getting qualified and avoid getting a underwriting letter I’ve heard a lot get denied after getting pre-aproved and going thru all the procedure’s I don’t know if this is true.

    • ScottSheldonLoans

      Maria thanks for the email. I am not sure I understand your question. Let’s try this …post this info for us and I will give you my opinion.

      Gross monthly income for you and your bf. …..?

      Payments on all debts just the minimums due each month……?

      Credit scores if you know them….?

      Cash to buy a home……?

      Let’s us know and I will prequalify you on this string.

  • Melissa

    Hi Scott, my husband and I are trying to get a loan. Her recently changed jobs (different title, different industry). We both have a credit score of 805, we currently have a mortgage. The bank told us that since my husband has a new job title we cannot get a mortgage, he needs to be there 2 years. His last job he was there for 11 years, and he left for a job that’s even more stable, with better pay. Why can we not get a mortgage?

    • ScottSheldonLoans

      Usually it is two years-a lender wants to get you qualified explain the job change in detail. This one aspect should not prevent you from getting qualified. I would get a different opinion from a different lender if you still have the same roadblock after providing a detailed explanation.

  • Susan

    I am a salaried employee and accepted a new position twice in the past three years in the same institution with a raise in salary at both times. Do I need to give an explanation of my pay increase in the past three years to my lender for refinancing?

    • ScottSheldonLoans

      No as long as the income raises are justified, no reason to have to explain all of the details.

      • Susan

        Thank you!

        • ScottSheldonLoans

          Good luck! thanks for the post

  • weluvourhouse

    Hello my husband and I are in the home buying process now. Our appraisal was just ordered. We are supposed to close on our house by June 2nd. Something discriminatory happened with my job, I had to miss work, and I ended up putting my two weeks notice in today for fear that I would be terminated. I made good money but was a contractor so had no job security. My last day is now set to be May 26th. At what point is our mortgage lender going to ask about my job again and/or check my credit? Do they check it the day of closing? I am not sure what to do. We don’t want to lose this house. Should I go back to work and beg them to let me work longer?

    • http://www.Credit.com/ Gerri Detweiler

      I checked with Scott and he confirmed my first instincts, which is that you need to talk with your loan officer now, and not wait until they find out later. He says this could be a big problem if not properly handled. Reach out to your loan officer asap and let them know.

  • charlie todd

    My husband has been with the same company over 12 yrs, this month they moved him from salaried to commission only. It will be more income however we were planning on buying a house this summer. How will this effect us getting a loan?

    • ScottSheldonLoans

      I would have a conversation with a lender in your area who can best advise. This very well could prevent the commission income from being used because there is no history of it. Usually lenders want a 2 yr average of commission income.

  • charlie todd

    I have been with the same company for 12 years, however I just switched this month over to commission only, Im still with the same company–.I will be making more money than I was on salary basis. How will this effect me buying a house in a couple of months?a

  • dr. james

    I’m a veterinarian about to move states and start working for a non-profit part-time. The part time pay will be close to what I was making full time at my last job. I’ve just been doing locum work for almost a year. I was told that banks do not consider non-profit income if they are funded through grants. Is this true? I will also be starting a clinic and I know that income is not eligible until it has been running for 2 years. Thanks.

    • ScottSheldonLoans

      Hello Dr James,

      I have not heard that before. However, if your nonprofit has the possibility of being unstable, the lender might want some sort of proof of continuance of that job being viable. If you work full-time and on a salary, and you switch to being part-time, my guess is the part-time income even though it’s more is still going to be considered hourly yes? If this is the case, the income is not the same in your income will be averaged year-to-date at best. This change could prevent you from qualifying as you’re going from full-time to part-time unless it’s etched in stone what you’re part-time hours will be and there is no variance to those hours. If you have the ability to switch to being full-time prior to looking for a home on a salary basis, you’d have a much easier time with procuring financing.

      • shaun mack

        Scottsheldonloans Hi goodmorning i will like to no if you will have two wight for 2 year to get a home loan because my wife just started a new job working for the state of California as a pt she gets paid hourly or can we apply for a home lone within this year
        Because we hear a lot of different things like we will have to wight for 2 years to buy a home and i will like to no if they will consider her going to school for l year in the field she is working in can

        Thanks in advanced

  • Debbie

    Just one last thought on my delema. Why is it that if I have a house with 200k equity,than why isnt that sufficient as collateral in being given a loan? Isnt the risk involved minimal for a bank since they can take my house at anytime if I default and the fact that the market wont fluctuate drastically at this point in time should give them total security that the bank would never lose money on such a loan. So I dont get it. Why isnt that alone a major deciding factor by which a lender would be willing to approve me?

    • http://www.Credit.com/ Gerri Detweiler

      Many loans are packaged and sold. The lender doesn’t keep the loan. And they can’t sell it if it doesn’t meet certain parameters. Also, it’s expensive and often difficult for lenders to foreclose on a home.

    • ScottSheldonLoans


      Geri is correct.There is a lot of things in today’s lending environment that do not make sense. This classifies as one of them. Obviously if you have that much equity in your home you are vested in continuing to make the payment obligation. The problem is that if there is no income on paper to offset the debt,the lender can’t justify making the risk iegranting you credit when there’s no ability to support it other than equity. There should be a program out there for people like this and I see it on the horizon, but probably not for at least a few years if not longer.

  • Debbie

    Well the real situation is that I live in a house that I inherited from my mother who dies in Nov. We created a living trust to accomplish this and at the time I thought that not assuming the loan or refinancing would be fine because I didnt qualify anyway. So I was just going to continue to live here as I have been doing for 5 years prior to my mothers death and be put on the loan as an authorized 3rd party which would allow me to do everything related to the property such as rent it out or live here but not modify the loan or put my name on it. But now I am finding it difficult to make the payments with a huge loss of income from working as her caregiver and also loss of her soc sec, benefits combined with my income which made up the overall income to pay the bills. The house has a lot of equity but the interest rate is 5.37 and by lowering it to 4% I could drop the payments to a much more manageable monthly payment if I was able to get approved. Thats the issue. I tried a loan modification thru a federal program for those who face hardship but cant get approved because the loan isnt in my name. My name isnt on the title either but this is not an issue because I have to be on the loan to get a modification and for the bank to work with me. In order to refinance I was told I need to work full time which meas 36-40 hrs a week which for me in order to keep my ssdi benefits would mean like 6.50 an hr to total 1.090 a month which is the maximum I can earn monthly and not lose my disability benefits. Also I was told by a mortgage broker that I have to work in the same industry which is health care and that my 2 year work history needs to be looked at as far as income. I only made 24,000 in 2014 and the same in 2013, and if I earned that same amount now, approximately $2000 per month than I cant get approved to refinance a loan for 125k which is what I need. I would need to bring the loan down to 95,ooo to qualify with only $2,000 a month income.But if I worked and made $2400 a month for 2 months they said I could possibly get approved to refinance the 125,000 using the current income( meaning I earn over the limit for social security and lose my ssdi benefits) but I can maybe qualify to get the mortgage approval. This approval is based on credit score of 680 and a property valued at 320k with obviously a lot of equity in it and a 5 year payment hisport in which I as my mothers power of attorney payed very aggressively to pay down the mortgage using my own money. Yet that doesn’t even seem to be able to be taken into account since the loan was not in my name. I feel so boxed in and dont know what to do. The current mortgage is $1445 and I want desperately to reduce it to about $1050 which if approved at 4% I could do but to get that approval seems next to impossible and to get a principal reduction or loan modification doesn’t seem to be an option the bank will discuss either since I am not on the loan. I am not even sure if I could get a job making 24,000 and even if I did I would be in pain doing it which is why I am on disability for my back, but I must lower this mortgage to survive and not have to sell my house. Besides its stupid to pay 6,000 more a month for the same mortgage and its makes it that much harder to pay my other bills being low income as it is. Do you have any suggestions? Please help.

    • http://www.Credit.com/ Gerri Detweiler

      Debbie – I wish I could advise but it’s simply beyond my area of expertise. You may want to talk with a non-profit housing counselor who can help you understand programs available for your situation. You can visit HUD.gov for a directory. I hope they can find some options for you.

  • ScottSheldonLoans

    Share with us the specifics of your situation and I can give you some feedback. This is too blanket of a question to answer because it is not that black and white.

  • ScottSheldonLoans

    Yes when you receive a w2 again you will have an easier time. Lenders need at least 24 months of self employed 1099 income. This is evidenced with two years of federal income tax returns.

  • ScottSheldonLoans

    Anytime…but, lender will need the offer/acceptance letter and at least one pay stub supporting the new job.

  • Liliana

    I took 1 year off due to maternity an I recently started working again. I did not file my taxes for the 2014 year for the same reason. I have been working in the same industry for over 3 years though. What are my chances of being able to purchase a home?

    • ScottSheldonLoans

      If you have your 2013 and 2012 federal income tax returns completed and you can provide to a mortgage company your IRS filled out extension form you should be eligible to apply and get qualified. As for the rest of your chances, there is a multitude of other things so there’s really no one way to say yes or no, but as for your maternity leave that should not preclude you from your ability to qualify.

  • tom

    I graduated from college recently. I accepted a job in my degree field and have been working there full time as an hourly employee for approximately 8 months. My new compensation is significantly more than the previous two years, as the past two years were all part time Jobs while in school. How does working in my degree field affect how my income is calculated? Will they still average the past 2 years as my income or will they use my new income since I am working in my degree field?

    • http://www.credit.com/ Credit.com Credit Experts

      Tom —
      They can consider your new income. See the “Income” section of this post for more: Think You Can’t Afford to Buy a Home? Think Again.

    • ScottSheldonLoans

      Yes your new income is going to take the anchor position for qualifying because it is directly related to the field you were studying for.

  • ScottSheldonLoans

    You need will need to provide an offer letter, and have in most cases,at least 30 days on the job supported with pay stubs in order to use the new income to qualify. It might mean getting an extension on your contract, otherwise, should not derail your loan at all, just may make it take longer. Good luck!

  • http://blog.credit.com/ Kali Geldis

    Hi Steve —

    It may not result in a rejection, but switching jobs right before applying for a loan may give you some new hoops to jump through in the lending process. Here’s an article we recently wrote that may address some of your big questions:


  • ScottSheldonLoans

    If same field, immediately. If different field you can still apply, but, you may be subject to more scrutiny over your job history. There’s no way to determine how it would be reviewed without knowing specifics. Generally, if you change jobs and you go from being W-2 to W-2 you are fine in most cases. If you go from being W-2 to self-employed that’s a big red flag. If you go from being self-employed to W-2, you should be okay.

  • steph

    My sister works part time for the past 4 years, got a promotion and several raises, but it’s still part time though. She’s going through the difficult process of getting approved for a mobile home loan. The manager says she would have a better chance if she was working full time at McDonald’s even though it would be less than what she makes on a part time basis! I feel that they are focused too much on how many hours she works than how much she earns. Her credit score is no problem if you were wondering. How is this possible? Is there a way around it? The manager says he’ll check around for research and get back to us Monday. I just would like to have a solid explanation if available to ease my anxiety until monday.

    • http://www.credit.com/ Credit.com Credit Experts

      Has your sister tried more than one lender? It may be that this particular lender’s underwriting qualifications include full-time work. But people who freelance or work part time can and do receive mortgage approvals, though perhaps not through the lender your sister is dealing with.

    • ScottSheldonLoans

      Yes, part-time work is very hard to determine income stability because it’s part time, and probably hourly right? I would exploring the possibility of a cosigner would be the least path of resistance if the lender will allow it.

  • http://www.Credit.com/ Gerri Detweiler

    As Scott explained in his article: “The income gets averaged as long as you’ve been an hourly employee — even if you’re making more money now on a per-hour basis.” Whether or not that is enough to qualify you for a loan depends on the amount of the loan you are trying to get.

    • ScottSheldonLoans

      Yes hourly employees income is averaged. Income averaging is not necessarily problematic as long as the income is high in relationship to the proposed mortgage payment plus consumer liabilities if any.

  • http://www.Credit.com/ Gerri Detweiler

    It will probably depend on whether you stayed in the same field in a similar position and similar pay. Would recommend you talk with a loan officer.

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