Bad Credit Mortgages Help

For those of you who are searching out bad credit mortgages we would enthusiastically point you to aa FHA or VA mortgage product.  The reason for this is because the guidelines allow borrowers with less than perfect credit some leeway with the stringent approval process.  When trying to qualify for a FHA or VA loan there are a few secrets that you should know to help you get approved quickly.

The first secret is knowing how underwriters calculate your income.  It is not as easy as just telling them what you make per hour and how many hours you work a week.  An underwriter will write down how long you have been working at your job and go straight to your YTD income of your latest pay stub.  They take this number and divide is by how many months have passed for the current year, or by the amount of  months you have been at the job for the current year.  If you have worked inconsistent hours this number can be very different than what you think you make per month. 

The second secret is knowing when overtime can be counted in your income calculation.  The only way you can count your overtime is if you have been working at that same job for 2 years or more.  If you have worked at that job for less than two years an underwriter will just skip right over the overtime YTD section of your pay stubs.

The third secret is to know how underwriters look at second jobs.  Many people are working two jobs in this economic recession and although it may be helping them to pay their month to month bills, it may not help you qualify for a house.  Underwriters will only count your second job only if you have worked at your first job for over 2 years.  Also the first job that you have been working must be a full time job to be able to count the second part time job.  By not knowing this you could really throw off your ratios and trick yourself into thinking that you are going to qualify, when in reality you may not qualify at all if you have not worked your first full time job for over 2 years.

The fourth secret to know is that underwriters require your last 2 years of w2′s or tax returns if you are self employed.  The reason for this is that an underwriter adds the total gross income for both years and averages them out.  The reason this is important is because if you significantly made a lot more this year than you did the previous year, the underwriter will average your income and not calculate your income at what you currently make. 

By knowing these secrets you can save yourself alot of underwriting surprises and go into a loan application appointment with confidence knowing that you will be approved.

Tags: bad credit mortgage, full time job, income calculation, part time job, second job, self employed, underwriting, underwriting guidelines, w2 calculation