three reasons your qualifying income may cause confusion on an fha loan
Post on 12-Jan-2017
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You have
GOOD INCOME FEW BILLSGREAT CREDIT
1 2 3+ +
shocked at the amount you are approved atChances are, unless you are a straight salary employee, the
problem is with your income; here are three reasons why.
1You might work 70 or even 78 hours a week, but if
you do not work 80hours a week, you are not
considered fulltime. An FHA loan and any other type
of loan, the lender is going to take an annual number
for your income. If you work fluctuating hours, they
are going to take an average of your hours over the
course of 52 weeks.
2Commission income works in a similar fashion to
parttime income. You are forced to use an average
of your income – typically a 2year average for
commission. This means if one part of the year was
exceptional for you, but another part was bad, you
are forced to take an average of those times in order
to get a real feel for your yearly income.
3If you work at a job that requires that you pay a variety
of expenses or you own your own business and you
write off a bunch of expenses, you are going to have
to take those expenses off of your income for
qualifying purposes. The FHA requires you to use the
income that you report to Uncle Sam.
3The good news is that if you know that you are going
to apply for a loan in the near future, you can control
what expense you write off for any given year,
allowing your taxable income to be higher for a year
or two until you qualify for your mortgage.
The best thing to do is talk to a lender abouthow they would calculate your income. Youshould never assume that the income you
make is what it will be at face value.
Best FHA LenderBestFHALender is a one-stop shop offeringuseful information about FHA loans and enablingcustomers to shop for multiple lenders.
Finding the
CL ICK HERETO LEARN MORE
Justin MchoodHe is Americas Mortgage Commentatorand has been providing Mortgagecommentary for over 10 years.
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