Secondary Employment Question

[msartsy]

Hello!

The amount (payment) I qualify for is less than what I had hoped. I have picked up a second job to be able to afford a larger mortgage payment. Will I have to work the second job for a specified period of time before this additional money will count toward my income?

Also, I have court ordered child support for a 16 year old. Should that count toward my income?

Tiffiny

[Nelsont]

24 months plus 2 consecutive years of w2s/1099s.

The reason is because a very high percentage of people do exactly what you are doing just to qualify for a higher amount and then quit or reduce their hours once they close.

I am not sure about your child support but it will only be guaranteed for the next year or 2 (???)

[msartsy]

Child support will be guaranteed for the next two years. So I have to work a second job for two years BEFORE it counts? I don’t plan to reduce my hours after qualification…I just want to be able to have and afford the home of my dreams. This is discouraging.

[TTrumble]

Hello msartsy,

Part-time income cannot be used for qualification or determining your affordable mortgae payment unless you have been on the job for two years, including W2’s, and have a statement form your part-time employer that your employment will continue for the foreseeable future.

If this rule were not in place, lots of people would get a second job to artificially inflate their affordability, then quit as soon as they closed. This would instantly make them “house poor”, which is one of the major things that the NACA program is designed to prevent.

How that second income CAN help you though is saving it and using it to buy down your interest rate. Buying down your interest rate will increase how much house you will be able to afford, even if the mortgage amount is based only on your primary source of income.

Child support must be court ordered and must continue for the next five years (per the court order) before it can be included in your income and affordability calculations as well.

To put it simply, we also want you to have the home of your dreams, but if you can’t afford it long-term, we’re not going to potentially set you up for failure.

Tim Trumble
Online Operations, NACA
ttrumble@naca.com

• This reply was modified 2 years, 3 months ago by TTrumble.

[RBJ619]

Greetings @ttrumble and/or @nelsont,

I was told on Wednesday that my second jobs income wouldn’t be counted because I haven’t been there long enough. The first budget I submitted, included that income. My action plan says to submit another budget and continue to do so, so my question is, do I now omit that income on the budget sheets I submit going forward? If I am in the qualification stage by my second jobs anniversary date of Sept 28, which I hope I will be in my new home by then, I will have reached the appropriate time frame. How does that work?

Thanks so much,

[Nelsont]

Until you have been at your 2nd job for 24 consecutive months the only thing it counts for is MRF. Your MC and underwriters will be able to tell if you are requiring your 2nd income in order to meet payment shock and pay your bills so that won’t work. In that case you will need to wait until 9/28 to qualify.

Otherwise yes fill out the budget form as if you had only 1 job. If at any point your income increases including after you are qualified but, before you enter into a contract on a house you can always be resubmitted for qualification. You will need approximately 1 month worth of paystubs at the higher income. In your case you will have that immediately.

Just a side note to be aware of. If you plan on being in your house before September 28 then your 2nd job will never come into play. If you want it to then you are looking at qualifying no earlier than october and being in your house possibly winter 21/22. Nothing wrong in that. Just depends on what you want.

• This reply was modified 1 year, 4 months ago by Nelsont.
• This reply was modified 1 year, 4 months ago by Nelsont.

[RBJ619]

Thanks so much for your response @nelsont!

I forgot to add one more thing. Should I also exclude my husbands overtime and shift differential in the budget calculation for income? He has worked for the Post office for 5 years, same night shift for the entire time. Employment has not been verified yet, but I just passed along the info for the work number on his end. He has worked overtime his entire career there. While overtime is guaranteed for full time postal workers, there is no set “amount of time” they will receive.

thanks again!

[Nelsont]

Guaranteed overtime and shift differentials are tricky. As a general rule your base salary only is counted toward your affordability. Company bonuses count but personal bonuses like sales commission do not.

All of that can however count if your employer can write a letter on company letterhead (no email or voicemail – it needs to be a legal document admissible in court) stating the hours and pay that’s guaranteed.

Since it sounds like the hours are not guaranteed you might be able to take the minimum or average it out. Your MC will have a better idea.

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