How does my employment history and pay structure affect my approval for a home loan?
Your lender is looking for stability of income. The stable and reliable flow of income is a key consideration. This doesn't mean you have to have a long history with either your employer or the industry, but it sure helps!
The lender evaluates your gross base pay. Are you scheduled a specific number of hours a week? Are you paid a salary? Do you receive pay in addition to your base income? Overtime, bonus, and commission, among other income types, are looked at as an average. Lenders are ideally looking at a 2-year history of receiving this type of income.
Self-employed borrowers need to have a two-year history of self-employment for most loan programs. Two years of tax returns are ideal, but they are not always required. Again, the lender is looking for stability in your earnings.
A key driver of successful homeownership is confidence that all income used in qualifying will continue to be received by the borrower for the foreseeable future.
To learn more about how your income and employment will be evaluated, my team and I are here to help.
*The information provided herein has been distributed for education purposes only. The opinions of the author do not necessarily represent opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax adviser for full eligibility requirements on tax deduction.*