“8 scenarios that hurt mortgage qualification
What you should know if you’re divorced or have student loan debt
Do I jeopardize my mortgage application by changing jobs before the loan closes?
Yes. The underwriter approved your application based on your documented income covering two years or longer, from one source. At closing you must certify that all the information in your application continues to be true, which short of committing perjury you won’t be able to do if you switch jobs. Your revised job history will be numbered in days rather than years, which could cause a rejection.
Back in the pre-crisis days, underwriters had discretion to use their judgment in such cases. If the borrower was moving up to a better position in the same field, for example, they would let it go. In today’s market, however, underwriter discretion has been markedly reduced, and the likelihood of rejection is uncomfortably high. The prudent thing to do is to defer the job change until after the loan closes. Nobody will care what you do then.
Will the rental income I receive from renting out my house during part of the year help me qualify for the mortgage I need to buy that house?
No, anticipated rental income cannot be counted as qualifying income unless it is documented in the owner’s tax return for at least two years. Further, only income net of expenses would be counted, and that number would be very small or zero if you expense everything you can in order to avoid taxes.
Can I qualify using my income and my spouse’s credit?
No. Good credit without the means to pay is of little value to lenders, and good income without the willingness to pay is not much better. Lenders require both capacity to pay and willingness to pay in the same person.
Before the financial crisis, married couples who had one spouse with the required income and the other with good credit often took “stated income” loans. Stated income was not verified by the lender. These loans were taken in the name of the spouse with good credit, who stated that the income of the other spouse was theirs. But stated-income loans no longer exist.
Have preapprovals become more useful to homebuyers since qualification requirements became more restrictive?…”
Read more of this article by Jake Guttentag here: “8 scenarios that hurt mortgage qualification”.