Hal's Mortgage Blog

Steady employment is one of the factors an Underwriter will use in approving or denying your mortgage application.

If you have been employed in the same line of work for 2 years or more and a job change makes sense – higher pay, career advancement etc., then there may not be a problem. Just make sure you will have paycheck stubs for the last 30 days or more proving your current rate of pay. Also, a Verification of Employment with your new company may be required. Part of that VOE contains a statement of probability of future employment.

Thinking about going in to business for yourself? My advice – wait until after your loan closes. Here’s why. Self-employed individuals need two years tax returns to prove income. Most likely an average of those two years will be used as your net taxable income. Most self employed use every legal deduction available so the net taxable income does not always reflect the cash flow or spendable income.

Your lender may also request a copy of your tax return from the IRS on form 4506-T. I have had these come back with major discrepancies. One buyer prospect had never filed his tax return even though he provided signed copies to me.

Everybody knows late payments can hurt, but here's a short list of what you don't know.

• Maxed out credit card? - deduct 10 to 45 points
• Settled a debt for less than full amount? - deduct 45 to 125 points
• Foreclosure? - deduct 85 to 160 points
• Bankruptcy? - deduct 130 to 240 points
• And of course the proverbial 30 day late payment - deduct 60 - 110 points

What can you do turn it around? Get a copy of "Your Credit Score" - An insider's guide to credit scoring and home financing.

It's free - no obligation, just call or email