• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Sonoma County Mortgages

Contact Us About Mortgage Financing

All financing provided by New American Funding

(707) 217-4000 | Prequalify Now

Search Sonoma County Mortgages

  • Home
  • Purchase
    • How Much Down Payment To Buy A Home?
    • How Much Income You Need To Buy A Home
    • How Much Should I Save For Buying A Home?
      • How Rates Affect Payment
    • No PMI Mortgages
    • FHA Loans
    • Sonoma County Disaster Loans
    • Jumbo Loans
  • Refinance
    • Mortgage Rates
    • Does It Make Sense To Refinance?
      • Get Your Refi Paperwork In Order
    • How To Pay Off Your Loan Faster
    • How To Remove PMI
    • How Lenders Price & Quote Loans
  • Loan Programs
  • Payment Calculator
    • Mortgage Affordability Calculator
  • Blog
  • Videos
  • About SCM
  • About Scott Sheldon

Primary Sidebar

Sonoma County Mortgages is a part of New American Funding

New American Funding - NMLS #6606

Get Your Latest Rate Quote Now!

How changing your income and job status may affect your mortgage chances

December 19, 2019 by Scott Sheldon

Share on Facebook Share on Twitter Share on Pinterest Share on LinkedIn Share on Email
How to get a mortgage if you've been furloughed to do to COVID_19

Securing mortgage loan financing requires an ample credit score enough equity and or down payment, but it also requires income. You must have documented proof of income as well as a two-year work history to qualify for nearly every mortgage loan program.

The following scenarios could be particularly beneficial or problematic depending on your financial situation.

If you are a W-2 employee from a company that you do not own that’s considered a positive so long as you have the two years’ work history (or education in lieu of the work history).

If however you are a W-2 employee from a company that you do not own and now you started a business and it’s in the same field you have to have at least 12 months of income identified on a tax return to use that income in order to qualify. If you have less than 12 months because you started your business for example mid-year that’s generally not going to be acceptable because you must have 12 months of documented income on a tax return to use that income meaning you’d have to wait for an entirely new year in order to qualify if you remain self-employed.

Working two jobs? You must have two years’ history of working two jobs simultaneously in order to use both incomes for both jobs in order to qualify whether you’re looking at an FHA loan or whether you’re looking at a Conventional loan. You’re hearing that right a brand new second job even though it’s income that can help you pay off debt or save money, but it will not help for income to offset a mortgage payment. In such a situation you would need a co-signer in lieu of using the second job income.

If you were working out of the country and or you are a new citizen of the United States or you’re here on a work visa the same thing applies you’re still going to need a 2-year work history working in the United States in order to qualify.

If you were previously self-employed and now you have a brand-new W2 job you’re in the clear. To be clear it must be a brand-new bonafide legitimate W2 job from a company that you do not own. If you are a W-2 employee and you pay yourself a salary from the company that you own that potentially could be problematic unless you’ve been filing self-employed for the most recent last five years at which point mortgage underwriting would only need one year of income tax returns in order to qualify. Yes, you can provide only 1 year if income tax returns filing self-employed so long as you have been filing self-employed for the most recent last 5 years.

If for example, you own the company from which you are earning wages and you’re bleeding your company dry in order to pay yourself a salary that’s going to be problematic especially if your 100% owner of the business.

Two caveats to this rule:

  • spouse is an employee of the company
  • you own less than 20% of the company

Hint if you’re an owner of the company and you own less than 20% of the business and you get paid wages as a w2 employee that income counts. Since the ownership is less than 20% the rule applies, you can bypass the need to provide additional tax returns so if you are losing money from a tax standpoint you can potentially still qualify as long as you have the W2’s and supporting pay stubs of the income needed to offset a mortgage payment.

The ways to offset not having enough income:

  • put more money down
  • Pay off debt even if the debt is 0% interest- that is always a possibility
  • get a cosigner
  • change mortgage loan programs
  • buy a less expensive house

If your situation requires anything unique or out of the ordinary it’s always good to talk to a lender who has the experience and knows what underwriting is looking for at the beginning of the process so they can best structure your loan in a way that will meet the requirements of the loan while putting you and your family into a program that you can afford.

Looking to get a mortgage? Get a no-cost quote now!

 

 

 

Related Mortgage Advice from Scott Sheldon

  • Your Percentage Of Business Ownership May Change Your Mortgage Application Status

                          Lenders will classify you as a wage earner employee or self-employed. How file…

  • Why Your Second Job May Not Cut It For A Mortgage

    You have a great credit score, manageable debts, solid income even have cash ready to…

  • Using Your Brand New Job Or Promotion To Get A Mortgage

    Just recently have a job change or receive a promotion? Despite what you might hear,…

  • payment to income for a car loan mortgage
    How the new tax plan may affect Sonoma County home buyers

    On December 22, 2017 president trump signed into law the new tax plan changing the…

Filed Under: Credit Score Info, Credit Score Questions and Answers, Economic News, First Time Home Buyers, Uncategorized Tagged With: cash out refinance, qualifying for a mortgage, refinancing my mortgage, Santa Rosa mortgages, shopping mortgage rates, sonoma county home buying, Sonoma County home loans, SONOMA COUNTY LOANS, Sonoma County Mortgage Rates, sonoma county refinancing

Get Sonoma County Mortgages News and Updates in Your Inbox

Footer

SCM on Facebook

SonomaCountyMortgages.com

Connect on Facebook

SCM On Instagram

Follow Sonoma County Mortgages on Instagram

Follow on Instagram

SCM on Zillow

Zillow Reviews for Scott Sheldon, New American Funding

See Reviews on Zillow

Location & Contact

Sonoma County Mortgages and New American Funding are an Equal Opportunity Housing Lender

Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
2455 Bennett Valley Road C107
Santa Rosa, CA 95405
1-707-217-4000
View SCM Map | Email Us!

Map of Sonoma County Mortgages New American Financing Office

View Map on Google

Copyright 2010–2023 SonomaCountyMortgages.com · About Us · Sonoma County Loans · Privacy Policy · Terms Of Use · Legal · Site Map

NMLS Consumer Access © New American Funding. All rights Reserved. NMLS ID#6606.
Corporate Office 14511 Myford Road, Suite 100, Tustin, CA 92780. We at New American Funding take great pride in our customer service and make it our number one priority. We encourage you to contact us for complaint resolution or any post-closing questions you may have regarding the servicing of your loan. We strive to have your experience with New American Funding a stellar one. In the rare case that our service did not meet your expectations, please call our customer care hotline at 1-800- 450-2010, ext. 7100 or you may contact us by email customerservice@nafinc.com. Please leave a detailed message and we will follow up with you no later than the end of the next business day. If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-450-2010 Ext. 7100 for assistance.

State Licensing (Opens in New Window) | Privacy (Opens in New Window)
Terms of Use (Opens in New Window) | Electronic Consent Agreement (Opens in New Window)
Opens in new window Opens an external site Opens an external site in a new window