Part-Time Jobs, Second Jobs and Your Mortgage Application

By
Mortgage and Lending with Guaranteed Rate, Marin County, CA NMLS: 22343

Part-Time Jobs, Second Jobs and Your Mortgage Application

 

I remember thumbing through the Recycler in Los Angeles when I first moved out there as a teenager.  Living on a shoestring budget, I was especially intrigued by the ads that promised the ability to make thousands per month while sitting in the comfort(?) of your home.  In my mind, that meant I could keep my day job, practice guitar eight hours and day and still have some other check rolling in without too much trouble.  Who wouldn't like that?  I never actually pursued any of these trinket-making, envelope-stuffing, part-soldering side hustles, but the reality of part-time income, either as a primary or supplemental source of monthly revenue, is appealing to many and necessary for some.  But what happens when these individuals make a mortgage application and attempt to qualify with some or all of this income?

 

Part-Time Income

Just because you don't work a full 40 hours a week does not mean you are disqualified from getting a great home loan.  Maybe you have a seasonal job or a position that does not require a set schedule.  If you have a two-year history of earnings in this role and you can document this with paystubs, W-2 forms, tax returns and a verification of employment, you're in business in our eyes.  Consistency is key and the more you have of it, the easier it will be to qualify your income from a part-time position.

 

Secondary Income

In today's gig economy, many individuals earn extra income through a secondary position, such as driving for Uber or Lyft, for example.  Still others, because of a highly refined skill in technology and/or medicine might find themselves effectively working a second job due to their expertise (and assuming a non-compete clause doesn't prevent them from doing so).  Here too, even if the income earned is substantial, we will generally not qualify it unless there is at least a two-year, documented history of its earning.  We must also show that the secondary position continues, so we would verify this employment with the employer just as we'd typically do for your primary job.

 

Burning the Candle at Both Ends

Here are some of the things that will disqualify, or at the very least make challenging, the use of secondary or part-time income. 

  • Payments in cash.
  • Irregular schedules.
  • Multiple secondary jobs that do not appear stable.
  • Part-time positions that do not appear to be ongoing.
  • Second jobs that pay you as an independent contractor (1099).  These technically create a "self-employment" situation where we would need a two-year history of tax returns which support consistent self-employed income.

This is not a complete list, but it will give most a good sense of whether their scenario might get consideration by a mortgage lender and allow them to use the income to help qualify for a home loan.  If you have secondary or part-time employment and you need it to help you purchase or refinance, get in touch at any time and we'll be happy to assess your situation and advise on what's possible. 

 

Help wanted, 

 

 

Robert J. Spinosa
Vice President of Mortgage Lending

Guaranteed Rate
NMLS: 22343 
Cell/Text: 415-367-5959 
rob.spinosa@rate.com

 

Marin Office:  324 Sir Francis Drake Blvd., San Anselmo, CA  94960

Berkeley Office:  1400 Shattuck Ave., Suite 1, Berkeley, CA  94709
 

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate.  In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate's Human Resources Department.

 

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood ChicagoIL 60613 - (866) 934-7283

Comments (5)

Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Rob- this is just the information that those who have second or part-time jobs needs if they are hoping to buy a home!!!

Feb 20, 2020 07:00 PM
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

You are a handy guy to have as a resource Rob. People need to know exactly what constitutes income - before they decide to purchase a property. 

Feb 21, 2020 11:18 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Rob two years seems to be the magical number in this business.

Feb 21, 2020 02:08 PM
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Rob Spinosa - Thanks for the great information!

When I saw the old 1959 ad about worms, you had me worried for a few seconds! 

Feb 24, 2020 11:17 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

I'm chuckling at the "Help Wanted" at the end of your post, Rob Spinosa ... love it.  

I always tell my clients it's not so much what the job is, as it is the consistency and longevity of that job.  Your post and info definitely speaks to that being true.  And the need to have a conversation with a lender long before you intend to buy.  That way you have the facts and can make plans accordingly.

Gene

Mar 06, 2020 10:06 AM