motgage loan use of second job income

[Anonymous]

my gf id tryiny ot get a pa for loan, we are getting different answers from lo's on if she can use her 2nd job income. her primary job started in 02/06 and her 2nd job was 01/09. she only makes about 25,000 on her main job and her second job about$11'500 /yr.. would really like to be able to use it to afford a better house. we are looking at going fha , her credit scores are shaky due to lack of credit----- 618 600 and 587. can anyone give me a straight answer????  we have preapproval somehow but for a low amount....

[Anonymous]

2 things.

2nd income will not likely be counted.  They require 2 years of tax retuns/job history to count it.

Approval.  With a midscore of 600, your approval may be shaky.  90+% of FHA lenders out there are requiring 620 minimum FICO score for a loan.  Alot of lenders will "pre-approve" you at 600 but getting a deal done gets really hard.  The lender is gambling that you will either find a way to raise your score 20 points in the meantime (paying down cc's help to do this alot) or that you can provide some compensating factors such as high cash reserves, etc to overcome this.  In reality. most people with sub 620 scores do not have ample reserves or they would not have that low of a FICO..  Either way, just giving you fair warning.  Alot of lenders out there are reeling peopl in saying they can do a 580-600 FICO FHA loan, and alot of people end up tossed aside and out a lot of time and money before the day is done.  Your lender might be one of the few still doing these though.  Just go into it with your eyes open and good luck with it.

One more thing.  Most lenders that are doing sub 620 are going to charge you both in higher initial fees, and higher interest rate.  So if you are shopping around, expect to see some jump in rates/fees at the lenders willing to look at a sub 620 file.

[ShanetheMortgageMan]

B. Part-Time Income. Part-time/second job income, including employment in seasonal work, may be used in qualifying if the lender documents that the borrower has worked the part-time job uninterrupted for the past two years and will continue to do so. Seasonal employment (e.g., umpiring baseball games in summer, working at a department store during the holiday shopping season) is considered uninterrupted and may be used in qualifying if the lender documents that the borrower has worked the same type of job for the past two years and expects to be rehired during the next season. Income from a part-time position that has been received for less than two years may be included as effective income, provided the lender justifies and documents that the income's continuance is likely. Income from part-time positions not meeting these requirements may be considered as a compensating factor only.

For qualification purposes, part-time income refers to jobs taken to supplement the borrower's income from regular employment (i.e., a second job – not meaning primary jobs of less than 40 hours per week.) If a borrower's regular employment involves less than a typical 40-hour workweek, the stability of that income should be evaluated as any other regular, on-going primary employment. For example, a registered nurse may have worked 24 hours per week for the last year. Although this job requires less than 40 hours of work per week, it is the borrower's primary employment and is to be considered effective income.

We recognize that many low- and moderate-income families rely on part-time and seasonal income for day-to-day needs. Lenders must not restrict the consideration of such income sources in qualifying these borrowers.

[Anonymous]

So if you haven't worked a part time job for more than 2 years it won't influence your approval? Or is it just another factor that helps your chances? I was conditionally approved and I am working a second job (been there about a year), but it is part time and I only bring in an additional $10k annually before taxes. Do they really care about my second job at all or is it all about my main source of employment where I bring in a lot more? If I were to quit the partime job or cut my hours before closing would it have any effect on my approval?

[ShanetheMortgageMan]

kdogg, you'd have to ask your lender if they were able to use the 2nd job income, if so, then most of what you are speculating about would be true.  If they aren't using it, none of it matters since it's not a factor in what you were qualified for.

[Anonymous]

Well they didn't use it so I guess i can do whatever i want..... I'll prob. stick it out a little longer so I can use my employee discount on some appliances.

[Anonymous]

low credit scores are not due to bad credit, lates non payments or judgements, they are due to lack of credit. 7 months ago she had no scores , never applied for credit of anytime. has cc now with a 0 balance. scores will rise,  waiting on the cc we put her on as an authorized user to report.  as for the second job it seems as if it is up to the LO or the UW  to decide if they use the income or not.. one lo told us we could use it but needed a 620 middle score, the preapproval come from another lo who says they cant use it. how confusing!.   the uu cc should definately give her a bump (hopefully)  As far as cash in hand- including first time home buyer 8,000 we have approx. $20,000 to put down..

[XAVIERSMAMA]

My MB told me that in order a second job to be considered you have to show 2 yrs job history of having 2 jobs.  How a second job is considered probably varies with different lenders, but basically they want to make sure you have a history of working multiple jobs and didn't just get a 2nd job to qualify for a larger mortgage.  Does your gf have a history of having more than one job?  Even if it's not the same is she can show that she has worked more than just her main job for the previous 2 years then they'll probably count both of them.  Also you didn't say whether you had any other installment loans (auto or student).  They might be including her second job, but if she has other loans out her dti could be affecting the amount you get an approval for.  Hope this helps.