Loan Scenario 1: A borrower works in a restaurant in Mesa Arizona and is a W2 employee. His income has gone from $9,000 in 2009, $12,000 in 2010, and is on track to make $24,000 in 2011. The borrower does not receive paystubs. He has a payment ledger from the company showing Year to Date earnings and withholdings.

Question: Can we get the borrower pre-approved today based on his employment and income scenario?

Answer: It is possible but we cannot give him full credit for this $24,000 even though he is on track to make that this year. The underwriter will want to average his income over the last 2 years, i.e., they take his $24,000 income for this year and add it to the $12,000 of 2010 and then divide that by 2 to get $18,000. So, we can use $18,000 for income. Now, we’ll need some proof that he has been receiving the income he states he receives. He doesn’t receive paystubs so we’ll need something else. The underwriter will want to see that last 6 months of bank statements with the check deposits in his account.

Employment History

Loan Scenario 2: A borrower and his family moved to Scottsdale Arizona in December 2010. He and his wife want to get pre-approved for a mortgage to buy a house in Phoenix, Arizona. He will be putting 20% down. He worked at a temporary job for 3 months until he received a permanent job with a good Salary in April 2011. He has been on the job ever since. Everything seemed normal until I realized that his previous employment for the prior 2 years was part time. I did discover that the reason the borrower was working part time was because he was going to school to get his masters degree.

Question: Are the prior 2 years of part time employment going to be a problem for the borrower’s mortgage approval?

Answer: Fortunately, the answer is no. It will not be a problem because the borrower has a good reason why he was working part time in the past, i.e., he was going to school to get his masters degree. Furthermore, the borrower’s permanent job that he secured in April 2011 was in the same field of study that he received his master’s degree. Therefore, the underwriter will give him full credit for his salary job that he has only had for a couple of months. The borrower is free to buy a home in Phoenix, Arizona.

If you have any questions about this or if you have any questions you’d like us to answer on our podcast, you can email your questions to team@azmortgagebrothers.com or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

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Thanks for listening and reading the Mortgage Brothers Show. Let us know if you have any questions you’d like us to answer on this podcast. You can email your questions to Tom@AZMortgageBrothers.com or Eddie@AZMortgageBrothers.com.

Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.

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