Underwriting Question

[Booma]

We are currently about to sign a contract for a new home and I have a slight worry about underwriting. We were pre-qualified and have locked a rate with the LO (VA loan @ 3.5% with $2K closing credit) for 45 days. My contract with the builder states I have to secure a lender commitment within 15 days or the deposit is forfeited, so I want to make sure all is well before making it official.

The concern is that I was deployed for four months and my pay history will not reflect my true income. I make $95-100K a year on the civilian side and my wife makes about $40K. The mortgage is for $337K and our DTI is mid-30s using my civilian earnings. The issue is that my pay stubs haven't caught up yet so I will have to use military stubs, which are much less. I have my previous tax returns to prove consistent earnings, but a big chunk of my pay is technically commission. This commission is consistent month to month, but if they look at my pay I've earned $40K YTD (military + civilian) where I would normally have earned about $75-80K without the deployment.

My rational side says that this is not a problem and they understand that the break in income was due to the deployment. The analytical side says that the UW will consider it a problem in the event I'm deployed again. I am likely getting out of the guard next summer when my contract expires, so I really have no chance of that happening. I don't want to lose my $5k deposit due to underwriting. Credit scores are mid-700s for both of us and my employment history (civilian) goes back about 7 years. 

Can anyone with experience in this situation share some knowledge? 

[ShanetheMortgageMan]

Has the loan officer reviewed all of your documentation already?  Or I guess if you are pre-qualified (instead of pre-approved) perhaps they just went off what you verbally told them and a credit check, without reviewing any of your documents.  If so, that is a situation where things usually don't go so well/leads to some surprises.

In past experiences with clients who have been deployed for a period of time, it's not been an issue if they are back to work on their civilian job as the civilian pay is used to qualify (what you receive on a monthly basis, not YTD divided by 12 months).  Commission income is calculated over a 24 month average though, an underwriter may remove the months you were deployed for from the 24 month calculation but to play it conservatively I'd just assume they wouldn't.