Home Buying in Oakland>Question Details

Cj, Home Buyer in Oakland, CA

oakland first time homebuyer program -- how is buyer income calculated?

Asked by Cj, Oakland, CA Sun Jun 15, 2008

specifically, could the most recent tax return be used to show income even if income has increased since filing?

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The answer to your question is Yes in most cases. If you are a W2 employee and have at least a 2 year history in your profession or line of work. If you are paid commission or bonus that accounts for more than 25% of your income or if you're self employed, the lender will use the average of the past 2 years.

Here's an example: A Teacher or Doctor that interns or is in school up until the time they are credentialed or schooling is complete - Then, their income increases dramatically! Lenders will use your CURRENT income and support your employment history with two years of W2's.

Also, tax returns are rarely used for income qualification unless a specific loan type requires it, you are self employed, you receive 1099 income or you own other properties and you are using income from the rents to qualify.

You are typically using your last 30 days pay stubs and last 2 years W2's to show employment history, not income.
0 votes Thank Flag Link Mon Jun 16, 2008
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