First Time Home Buyer Qualifications - Income

First time home buyer qualifications are very strict when it comes to income.

Employment must be verified for 2 years with gaps no more than 180 days. If you were a student transcripts from the school will be required. Just remember, you are a first time home buyer, qualifications are strict.

A very important number is your monthly income. If there are 2 borrowers, figure each one separately then add them together.

You must determine your monthly income.

There are 4 different types of wage earners.

1.Salary or Hourly

2.Salary with Commission

3.Self employed

4.Retired

Please remember each underwriter looks at income differently, but if you follow my instructions you will be 95% accurate.

Hourly

Multiply 40 times the hourly rate then multiply by 52 and divide by 12.

Example $15.00 per hour times 40 equals $600.00 times 52 equals $31,200 divided by 12 equals $2600 or your monthly income.

Over time.

Average your monthly overtime and add it to the monthly income.

Regular Pay $2600 Over time average pre month $200

Total monthly income equals $2800

Salary

Divide you annual salary by 12.

If you get an annual bonus average over 2 years and divide by 12.

Example: Annual income $45,000 divided by 12 equals $3700

Average bonus for the past 2 years $4500 divided by 12 equals $375. Total monthly income $4075

Salary with Commission

You will need to show a 2 year history of receiving commission.

Example Base Salary for the current year is $30.000 divided by 12 equals $2500.

Commission for the past 2 years equals $75,000 divided by 24 equals $3125 Total monthly income $5625

Self Employed

This is the most difficult monthly income to determine.

To get some idea average your adjusted gross income and divide that amount by 12.

I am adding additional information here as your adjusted gross income does not tell the whole story. You must show a 2 year history of self employment.

Example Average adjusted gross income $60,000 divided by 12 equals $5000 Total monthly income $5000

Helpful Forms and Schedules For the Self Employed

Self Employed Forms Click Here OK! We have looked at the income for first time home buyer qualifications, just one item on the first time home buyer checklist.

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