topic Re: Jumbo loan options and OT pay question in Mortgage Loans

Jumbo loan options and OT pay question

Anonymous — Tue, 04 Feb 2020 00:11:38 GMT

I've got a slightly odd situation and am hoping someone can give good advice.

Right now my spouse and I own a home with a VA loan. We plan to sell this home and move into the home we're trying to get a mortgage for. Our current home is valued at about $390k and we owe $259k. We cannot sell before being able to move into the new home though.

Spouse's mid score is 660, mine is currently showing at 598, but should be up to 620 when creditors report again (broker did a simulation and told me which items to pay down to what amounts).

When using our total gross income, our income comes out to just under $20k a month. DTI is 27.8%.

The funky situation comes in because I am employed as a nurse for my daughter and I get paid for 112 hours a week. While I get paid $30 an hour, the base rate is $22.70 for 40 hours and the remaining 72 hours is overtime at about $35 an hour. I have gotten overtime each week for the past 11 years as her provider, but not as much as I do now. The increase in overtime started in August 2019. The hours I get are guaranteed and will not decrease ever and the pay will only increase over time. However, the broker will not count my overtime and is only using my base rate to try to qualify us for a jumbo loan. Of course we do not qualify without my overtime pay and that puts our DTI at 78%.

We were outright denied for a VA jumbo loan because they wouldn't count the overtime pay.

Our plan is to build a house (through a new home builder, no construction loans or anything) in a very specific part of town that keeps my child in the same school district and within 20 minutes of the hospital for her. We want to get a dirt start home to have it built ADA accesssible for her as it's significantly less expensive than trying to make a pre-built house accessible. If we don't sign a contract within this next 6-8 months, there will not be any homes left to build where we need it to be. Our goal was to sign a contract by April 1st with the home being finished 10 months later.

Are there lenders that will use my full income? Is it even possible to get a jumbo loan with my 620 and his 650 mid-score?

Re: Jumbo loan options and OT pay question

Revelate — Tue, 04 Feb 2020 02:20:35 GMT

I think you're going to just have to talk to a bunch of lenders.

There are no hard and fast rules for jumbo loans, outside of the VA it's literally all "let's make a deal."

A lot of them will look somewhat like traditional mortgages because honestly it's not a bad practice at all and it may come that you're stuck for the next year and a half or whatever before you can qualify... but you may be over thinking this too: there's all sorts of arrangements that you can make to not have to carry the DTI of both houses at once TBH: there are contingencies, there are bridge loans, etc.

If that 78% is for the new place, seems doubtful but if I understood your post right you were thinking both and that shouldn't be the case: there are known financing options for situations like yours.

Re: Jumbo loan options and OT pay question

Shooting-For-800 — Tue, 04 Feb 2020 11:53:15 GMT

You get paid $12k per month to take care of your own daughter?

The government pays this?

Is this option available to care for elderly parent?

I would think a CU would base your income on average of W2s not hourly pay.

Although overtime is not guaranteed, neither is any job.

Re: Jumbo loan options and OT pay question

Anonymous — Tue, 04 Feb 2020 13:41:59 GMT

Sorry, my wording was probably super confusing, let me clarify a bit. The 78% DTI is if they go off of only my 40 hour pay per week (at $22.70 per hour), rather than my whole income (112 hours a week). If they use my whole income, the DTI is just under 28%. That's using my current mortgage payment. Obviously the new one would create a higher DTI, but still reasonable if they use my whole income amount.

Re: Jumbo loan options and OT pay question

Anonymous — Tue, 04 Feb 2020 13:46:40 GMT

Shooting-for-800, in short, yes. My daughter needs 24/7 skilled nursing care. I'm employed by a home health care company as her nurse for 16 hours a day of those 24 hours. Her private insurance and secondary medicaid (through an extensive needs waiver) pay for her nursing care in order to keep her out of a hospital/nursing home.

I know there are programs that allow adult children to be paid caregivers for their eldery parents, but I don't know which states provide it, sorry. It is generally through the state's HCBS (home & community based services) waivers.

Re: Jumbo loan options and OT pay question

Revelate — Tue, 04 Feb 2020 21:03:00 GMT

@Anonymous wrote:
Sorry, my wording was probably super confusing, let me clarify a bit. The 78% DTI is if they go off of only my 40 hour pay per week (at $22.70 per hour), rather than my whole income (112 hours a week). If they use my whole income, the DTI is just under 28%. That's using my current mortgage payment. Obviously the new one would create a higher DTI, but still reasonable if they use my whole income amount.

Not a loan officer but I think as stated above it goes off 2 years income when we're talking OT / bonus / commission / etc... basically anything that by definition is variable and consistent OT I suspect is still considered variable.

For example own work on my second gig is a little inconsistent too over the past two years, though if they average W2's I'll come out just fine. Trying not to have to claim the second job in my case, because there are months I make absolutely nothing even if I'm paid W2 contract, but when I am paid, it's non-trivial and last year like you with your OT it makes my DTI calculation irrelevant on much larger properties than what I'm looking at now.