Skip to main content

Find out what your required income is and how it is Calculated




Find out what your required income is and how it is Calculated
Annette Bui | Updated June 17, 2020, | Mortgage Programs 101
Contrary to what most consumers believe, the income calculation is much more conservative than you may realize because of Fannie Mae and Freddie Mac guidelines. When your income is salaried, and you have been with your current employer for two years then it is simple math. However, if your income is a base salary or hourly plus overtime, bonus, commission. Then the income is determined based on your past two-year history. Underwriters want to see your hours worked if you are hourly paid over the last two-year history. Generally speaking, if your overtime, bonus, commission, and hours worked are increasing in the last two years then they will average the amount including the year to date. 

However, if your income dropped recently due to fewer hours worked, less overtime availability then you may only be eligible to use the lower and most recent amount of earned income from overtime, bonus, commission. It all boils down to how your employer completes the verification of employment form and/or if you have the year-end paycheck stubs from the last two years to show the breakdown. 

To alleviate questions, uncertainties as far as the income requirement based on your existing debts, mortgage balance, or desired loan for a purchase. Below is a cheat sheet:







Comments

Popular posts from this blog

10 Legit Online Gigs to Make Cash in 2020

5 Legit Virtual Jobs to Make Cash in 2020   Annette Bui| Updated July 7, 2020 | Make Money   Are you over living paycheck to paycheck and always worrying about money? Grab my FREE Budget Cheat Sheet and take control of your budget today! More and extra of us are searching for respectable online jobs that we can work remotely. It can be challenging to discover workplace jobs when you have children or other commitments and discovering an online job can provide you so much greater freedom and flexibility to earn extra money.   Affiliate Marketing Affiliate advertising is where you can earn a commission from merchandise and offerings that you recommend to your readers.   Products or Services You can create your personal merchandise or offerings and promote them thru your website, and many recommend that the fine way to make money from your blog is to do this.   Blogging You’re currently studying online blogs that earn top bloggers over $5,...

Things to know about a Title Report

Things to know about a Title Report Annette Bui| Updated March 7, 2019 |  Mortgage Programs 101 Most homeowners are focused on securing the best rate or getting a good appraised value when buying a home. A very important aspect of the home buying process that may impact the closing time frame is what is shown on a title report. Oftentimes when buying a condominium, the lender will need to get the homeowner’s insurance binder. Depending on the community, this duration may take as long as 5-7 business days. Things to keep in mind to understand how a title report may affect you. Legal description-the legal description gives you more detailed information on the property that is not shown in the original listing advertisement. It is a written detail of property boundaries, any inclusion of property’s interest in common areas, easements and or any parking that is included. If it is a condominium, you will get information on any non-exclusive or exclusive easements. Taxes-R...

Am I getting a Stimulus Check?

How do I know if I will get a Stimulus Check? Annette Bui| Updated May 11, 2020 |  Mortgage Programs 101                Just because you are not required to pay taxes does not mean you are disqualified from receiving a stimul us check. During these hard times, it is important to sit down and review all your resources. Find out if you can still receive relief even if you have not filed taxes for being under the income threshold. Visit IRS.gov and click on "non-filers" This web page will allow for you to enter in basic information to the IRS to calculate and estimate if you qualify. You can enter in information to receive funds via pre-paid card (recommended) it can be mailed.  Beware of scammers, there is no cost or charge to these services!  Yes, but you will need to visit IRS.gov and then click on “Non-Filers: Enter Payment Info Here. n.d. (25 April 2020).Economic Stimulus Checks. Retrieved from https://www.consumerfinance...