Mortgage Advice Needed

Hello everyone,

I apologize for the phony name, I am in disguise because I'm not comfortable putting this information out there under my real identity.

DH and I want to buy a house this year (hopefully within the next 6 months). We are currently renting in the city and pay a pretty penny for the space we have. We want to buy on Long Island.

Anyway, I'm coming to you for advice on the mortgage process as I know things have gotten very tight in the mortgage/banking industry. Here's the situation:

We have very good credit (scores in high 700) and zero credit card debt. One car payment which will paid off in June. We have the cash for a down payment of 20%. Problem is DH received a huge salary increase this year and his last two years' W2 and tax return show an income that is not reflective of what he brings home now. My salary is decent and I've worked for my company for more than 2 years. These being the facts, how on earth are we going to get approved for a mortgage if our income for 2008-2009 was well well below what it currently is. I am afraid we won't get approved and will be renting forever.

Are there lenders out there that would accept a paystub and a letter from DH's employer indicating his current salary? How deep into the past are lenders looking?


Any advice or insight would be greatly appreciated.

Re: Mortgage Advice Needed

you have a fm

Re: Mortgage Advice Needed

you should talk to a real estate attorney. They could guide you in the process of securing financing without being predatory as some mortgage bankers and brokers are. The attorney I used was very good I have recommended him to all of my family and friends. He is located in Hicksville in Long Island. I think he does business through out the whole state. Check out his website Daniel Boldi - Real Estate Attorney

Message edited 1/7/2010 9:54:58 PM.

Re: Mortgage Advice Needed

I just went through this.

Lenders don't care how much you made last year; they care how much you'll be making as you pay back the loan. I got pre-approved from 3 banks and not ONE asked me what my earnings on my last year's W2 was; they only want to see current salary info. They want to see one month's pay stubs. Now, I'm a teacher and my pay stubs indicate what my contracted rate is, so maybe it's different. If your DH works construction or something like that where his earnings vary month to month, that's a different story. Also, they don't include overtime unless you can document a 2-year history of it.

You will be fine. 20% down, credit scores in the high 700's and little or no debt? You will be approved everywhere you go. Despite what's going on in the economy, banks are still lending ridiculous amounts of money to people with good credit scores. They will approve you for a 40% debt-to-income ratio EVERYWHERE. (As in, if you guys make a combined $10,000 per month - gross - they will approve you for a mortgage that has your payments at $4000 per month. As in, a mortgage for over $400,000. It's insane.)

Good luck.

Re: Mortgage Advice Needed

My DH basiclly doubled his salary in one year-they didn't seem to care what it used to be-they cared what is was now.

Re: Mortgage Advice Needed

Re: Mortgage Advice Needed

The bank will use your current income

You only need paystubs to prove this

It's not as hard to get a loan as the media makes it out to be...

Re: Mortgage Advice Needed

The banks look at your W2s to see that you've have consistent income. They look at your current income only when giving you the amount for your loan.

I think what is going to be a big help to you is the fact that you are putting down 20%. Many have not been able to afford 20% (when if you think about what houses cost 2 years ago could have been $80k-$100k) so they were putting down less or nothing at all.

This should be an easy process for you. Good luck!

Re: Mortgage Advice Needed

Re: Mortgage Advice Needed

You will be asked to produce pay stubs from the two most recent pay periods, and they will call your employers to verify salary and employment.

You shouldn't have any problems.

Re: Mortgage Advice Needed

Re: Mortgage Advice Needed

I did not have to provide any W'2, they checked my pay stubs when we went for the loan and again before we closed.

Re: Mortgage Advice Needed

Just wanted to add that you should be sure to budget closing costs - not sure if you have that in addition to the 20% down but they can run around 5% of your purchase price

Re: Mortgage Advice Needed

they look at current pay stubs and you tell them what your income was.

the due date for employers to mail out your 2009 w2 is jan 31 so you should have your 2009 w2 soon.

they also ask for bank statments. I'm sure the money went into the bank right?

don't worry, they are strict, but as long as the income is not cash you will be fine.

you will have no problems at all!!!

Re: Mortgage Advice Needed

My DH and I are in the process of closing this upcoming week. for the 2008-2009 week, my income was supstantially low, because I quit my current job and went back to grad school full time. They only asked for transcripts stating I was in school, and were really just concerned with what I was making now (current paychecks).

Good Luck!!!