You're buying your first Georgia home, congratulations you are on your way to achieving the American dream. Now there are two ways to purchase the property one is to pay cash, two is to apply for a mortgage.
If you are going to finance your purchase, the lender is going to verify that you have the income necessary to repay the debt.
So, let's talk about your employment history for a salaried or hourly paid employees, ideally we are looking for at least two years with the same employer. In each case we will calculate your gross monthly income. This figure is used to determine how much you qualify for in terms of your monthly housing payments. Again, this pertains to all financing programs, conventional, FHA, VA, USDA and Jumbo loans.
So if you are paid salary, take your annual salary amount and divide by 12. As an example, if you make $60,000 a year, your gross monthly income would be $5000.
Let's say you're paid hourly. Here is how you would calculate your gross income. Take your hourly rates times the number of hours you work per week times 52. That total will then be divided by 12 to give you your gross monthly income. As an example if you work 40 hours a week at $20 per hour, your gross annual income would be $41,600. Dividing that by 12 gives you a monthly gross income of $3467.
For a W-2 paid employee the calculation to determin income are very straight forward. If you are a self employed borrower, we will need to use your last two years federal tax returns to document income and ability to repay the debt. This is where some self-employed borrowers have a difficult time while qualifying for mortgage. The advantage of being self-employed are the dedcutions for business expenses and other deductions. The downside, those deductions will reduce your bottom line in qualifying income.
In either case making any type of career change changing companies, changing fields should all be put on hold until after you complete the mortgage process.
To simplify the process, talk with your licensed mortgage loan professional to make sure you qualify for a home loan.
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