Total Panic!!! Need answer from mortgage gurus!

[FSUGAPEACH]

DH made $75K on 2010 W2's and $106K on 2011 W2's due to OT and work project. YTD so far for 2012 is only $7200 (averaging about $4200 per month). How will income be calculated? OT project is stating back up in Q2 of this year. LO initially said he will take average of W2s for 2010 and 2011 now he's telling us that the most important criteria is YTD which SUCKS because it includes 0 OT. Help!!!!

[DallasLoanGuy]

loan officer needs to talk to the underwriter.

thye comment: "ytd is most important" is totally false. if it were true, people with seasonal income fluctuations would never qualify.

i suggest a new loan officer

[FSUGAPEACH]

Ugh! So what is your past experience on what the UW will say? I was thinking that the 2 year average of W2s would make the most sense! Especially since he has been with the same major telecommunications company for the past 12 years and the OT has been fluctuating since the beginning of his employment!

[Anonymous]

This is a very good question hope you do not mind me chiming in asking myself. 

DH only made 50K in 2010 but he made 65K in 2011 he was also off for 3 months on a job injury in 2010 but he has gotten a promotion in 2012 and makes more than ever so won't they use the current year if he has gotten a promotion? Not overtime, just more pay

[DallasLoanGuy]

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@FSUGAPEACH wrote:
Ugh! So what is your past experience on what the UW will say? I was thinking that the 2 year average of W2s would make the most sense! Especially since he has been with the same major telecommunications company for the past 12 years and the OT has been fluctuating since the beginning of his employment!

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average 2yrs w-2 would be the best calculation.

any time i have a question about calculating income, i go to the underwriter and have them sign off on it up front during the preapproval process.

[DallasLoanGuy]

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@Anonymous wrote:

This is a very good question hope you do not mind me chiming in asking myself. 

DH only made 50K in 2010 but he made 65K in 2011 he was also off for 3 months on a job injury in 2010 but he has gotten a promotion in 2012 and makes more than ever so won't they use the current year if he has gotten a promotion? Not overtime, just more pay

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with no overtime/commissions we do not average. we just use current income

[Anonymous]

When I was in the consumer fin. Biz. I would always approve people at their salary. It was 50/50 if my underwriter would use OT pay unless. One of two things...

1. The employer would write a letter of explanation and include that it would continue for 12 months.

2. They would review past paystubs to see if the OT was normal or reoccurring monthly.

So the long and short it really depends on the lender and their underwriting standards.