You want an FHA loan and you know that you make $70,000 per year and you have very few bills, so you figure you are a shoe in for the program. You contact your local bank and get the process started because you want to start searching for a home. Once the approval comes across, however, you are shocked at the amount you are approved at – it is much lower than you ever anticipated. How did that happen? You have great credit, a good income, and very few bills, what could the problem be? Chances are, unless you are a straight salary employee, the problem is with your income; here are three reasons why.

2. You have
GOOD INCOME FEW BILLSGREAT CREDIT
1 2 3+ +
shocked at the amount you are approved at
Chances are, unless you are a straight salary employee, the
problem is with your income; here are three reasons why.

3. 1You Work Part-Time

4. 1You might work 70 or even 78 hours a week, but if
you do not work 80­hours a week, you are not
considered full­time. An FHA loan and any other type
of loan, the lender is going to take an annual number
for your income. If you work fluctuating hours, they
are going to take an average of your hours over the
course of 52 weeks.

5. 2You Work on Commission

6. 2Commission income works in a similar fashion to
part­time income. You are forced to use an average
of your income – typically a 2­year average for
commission. This means if one part of the year was
exceptional for you, but another part was bad, you
are forced to take an average of those times in order
to get a real feel for your yearly income.

7. 3You Have
Unreimbursed Expenses

8. 3If you work at a job that requires that you pay a variety
of expenses or you own your own business and you
write off a bunch of expenses, you are going to have
to take those expenses off of your income for
qualifying purposes. The FHA requires you to use the
income that you report to Uncle Sam.

9. 3The good news is that if you know that you are going
to apply for a loan in the near future, you can control
what expense you write off for any given year,
allowing your taxable income to be higher for a year
or two until you qualify for your mortgage.

10. The best thing to do is talk to a lender about
how they would calculate your income. You
should never assume that the income you
make is what it will be at face value.

11. Best FHA Lender
BestFHALender is a one-stop shop offering
useful information about FHA loans and enabling
customers to shop for multiple lenders.
Finding the
C L I C K H E R E T O L E A R N M O R E

12. Justin Mchood
He is Americas Mortgage Commentator
and has been providing Mortgage
commentary for over 10 years.
Information Provided by

13. m o r t g a g e . i n f o
f a c e b o o k . c o m / w w w . m o r t g a g e . i n f o /
@ _ m o r t g a g e i n f o
p i n t e r e s t . c o m / m o r t g a g e _ i n f o /
H o t l i n e : 8 5 5 ­ 5 3 1 ­ 7 6 7 7
VISIT US!