Monday, September 30, 2013

Part-time earnings may not count when seeking a mortgage

Part-time earnings may not count when seeking a mortgage

The two-year rule for counting part-time income has been an industry standard for years and was recently incorporated into regulations adopted by the Consumer Financial Protection Bureau. The rationale is straightforward: If part-time income hasn't been established for an extended period of time, it may not be dependable or available in the future to make monthly payments on a mortgage. The industry also has restrictions on qualifying seasonal income and overtime earnings.

 Part-time or second-job income may be used if it can be verified as having been uninterrupted for the previous 2 years and there is a strong likelihood of continuation. Seasonal income may be considered if the borrower has worked in the same job for the past 2 years, and expects to be rehired for the next season

Unacceptable Sources of Income

Income derived from any of the following may not be used in calculating qualifying income:

• Projected income
• Draw Income
• Capital withdrawals
• Expense/Auto Reimbursement 
• VA Education Benefits
• Income not listed on Tax Returns
• Any income that cannot be documented and verified.

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*

Louisville, KY 40222*

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