Conventional loan with 790 score and low final paystub

[Anonymous]

Hello. I have been anxious about my convetional loan approval. My concern is that I had been pre approved for 600k loan with credit score of 790+ With 20% down. My w2 for last 2 years avg to about 13k. Student loans is with income repayment plan so about 600/m payment. No other debts. Interest rate 3.25%. I am currently in underwriting process and they are requesting another paystub before the closing date in February before final approval. My paystub might be slightly low to averaging about  10.5-11k for 2022 so far. I get paid on commission and it's low due to covid and cold weather fear. Should I be concerned? 

[4sallypat]

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@Anonymous wrote:

Hello. I have been anxious about my convetional loan approval. My concern is that I had been pre approved for 600k loan with credit score of 790+ With 20% down. My w2 for last 2 years avg to about 13k. Student loans is with income repayment plan so about 600/m payment. No other debts. Interest rate 3.25%. I am currently in underwriting process and they are requesting another paystub before the closing date in February before final approval. My paystub might be slightly low to averaging about  10.5-11k for 2022 so far. I get paid on commission and it's low due to covid and cold weather fear. Should I be concerned? 

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With your scores and down payment, I would not worry.

The paystubs are used to verify you still have income.

My lender wanted pay stubs at the beginning, middle and just before closing.

Lender even did a SP before the loan funded.

In other words, quite normal.

[Anonymous]

Thank you @4sallypat ! That helps. 

[VALoanMaster]

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@Anonymous wrote:

Hello. I have been anxious about my convetional loan approval. My concern is that I had been pre approved for 600k loan with credit score of 790+ With 20% down. My w2 for last 2 years avg to about 13k. Student loans is with income repayment plan so about 600/m payment. No other debts. Interest rate 3.25%. I am currently in underwriting process and they are requesting another paystub before the closing date in February before final approval. My paystub might be slightly low to averaging about  10.5-11k for 2022 so far. I get paid on commission and it's low due to covid and cold weather fear. Should I be concerned? 

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Great question.

Here is what the Fannie Mae guidelines say:

Income Trending: After the monthly year-to-date income amount is calculated, it must be compared to prior years’ earnings using the borrower’s W-2’s or signed federal income tax returns (or a standard Verification of Employment completed by the employer or third-party employment verification vendor).

• If the trend in the amount of income is stable or increasing, the income amount should be averaged.

• If the trend was declining, but has since stabilized and there is no reason to believe that the borrower will not continue to be employed at the current level, the current, lower amount of variable income must be used.

• If the trend is declining, the income may not be stable. Additional analysis must be conducted to determine if any variable income should be used, but in no instance may it be averaged over the period when the declination occurred.

So the question is, do you still qualify if your income is reduced to $10,500 per month?

Based on the info you've provided, you should be fine.

Call your loan officer and ask if they've recalculated your income and re-run your file through AUS.

[Anonymous]

@VALoanMaster  thank you for sharing those guidelines!