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Commission income and 2 year history?

Contributor

Commission income and 2 year history?

We just faxed over our documents to the bank yesterday for our pre-approval but the wait is killing me.  I was wondering how strict lenders are about having a 2 year history on commission income.  I work as a massage therapist (if you couldn't tell by my screen name) and the only pay I receive is commission (a %age of the services rendered) and tips (most are shown on my pay stubs).   Since I just graduated from massage school in September, I only have 5 months on this current job.  Before that I was in school and a stay-at-home mom.  My 2007 w2's show a very small income since I only worked part of the year before I left on maternity leave.

 

So is it safe to assume we don't stand a chance getting approved?  My husband certainly doesn't make enough to get us approved.  What about FHA loans?  Are they a bit more flexible?

 

TIA!

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3/27/09 Mortgage Application:
Me: EQ 691 EX 659 TU 714
DH: EQ 670 EX 677 TU 702
Message 1 of 3
2 REPLIES
Super Contributor

Re: Commission income and 2 year history?

per FHA manual

 

 1.9.2.4.4 Commission Income

· Commission income must be averaged over the previous two years. The borrower must provide

copies of signed tax returns for the last two years, along with the most recent paystub.

Unreimbursed business expenses must be subtracted from gross income.

Retired Lender
Message 2 of 3
Contributor

Re: Commission income and 2 year history?

What a bummer.  I only made a couple of thousand in 2007 and 2008.  I guess we'll be renting for the next 18 months. Smiley Sad
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
3/27/09 Mortgage Application:
Me: EQ 691 EX 659 TU 714
DH: EQ 670 EX 677 TU 702
Message 3 of 3