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Employment/Income question

My boyfriend and I got preapproved and he lost his job the same day! It has been a month now and he is about to start a new job out of state. Will the one month effect us when we get ready to buy in the next 6 months? He did receive unemployment and he is in the same industry as before.

Also, We just got to the point where they would count his commission since he is in sales. If his commission is more with the new job, will it be counted the same as his base pay?
  • September 05 2013 - US
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Answers (4)

You'll need an LOE or Letter of Explanation for the Underwriter, to explain the gap in employment...

The unemployment income would never be used or counted, since its not something that would continue-

Regarding commission, they'll be using a 2 year average, and since he is in the same industry, they should be able to use the new commissions as income-  They will NOT take the higher commission as income...

Good Luck
  • September 05 2013
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Commission income with a new company in another state will be an issue that needs to be addressed by lender providing a pre approval. There is likely to be concern of how previous commission income can count if a new sales territory is involved. Being in same line of work, does not guarantee that commission in new company in a new location will continue to follow past performance.
  • September 05 2013
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Rich is right on below, but I will add the following. I as a LO am commission based. I just closed on my home loan and I was hoping my current 2013 commissions would be used of worse case considered, but since I don't file quarterly income taxes, this year's income didn't come into play. The UW averaged my 2012 and 2011 subtracted any 2106 Unreimbursed Expenses which can be be seen on Sch A, and that was it. If you're needing to use 2013 commissions to qualify for a higher loan amount, you'll have to file quarterly or wait until next year. But be advised commissions will always be averaged over the past two tax returns.

Best of Luck!
  • September 05 2013
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Thanks for replying! The responses have really helped. More than likely, I will not be moving with him until the first of the year either way. This will allow some time on the new job and filing of the 2013 tax return. You bring up an interesting point on the "new job in different state" issue. I sure hope this doesn't hurt us when the time comes.

Thanks again!
  • September 05 2013
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