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FHA loan with 100% comission?

we are looking to buy a home and we would like to apply for an FHA loan but my husband is a car salesman and has been for over two years, however, he worked at one dealership for a year then moved over to a better one and has been working there for over a year, does that still work for the two years of commission based income or does he have to be in the same place for two years. Also our income has increased over the 2 years.
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October 07 2013 - Idaho Falls
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Many lenders will read the FHA guidelines and interpret them a little bit differently.  Most lenders are still pretty risk averse on self employed however this is a bit different so you might be better off.

Most will look at is as 2 years in the same line of work even though it has been at two different places.  If he was in commission sales prior to selling cars, some underwriters will give credit for that time too.

Keep in mind that there are many different factors these days, not just income/debt/credit in approving the loan.

Remember, all lenders are not created equal or else they wouldn't have so many different types of lenders out there.  The main thing is teaming up with lender that knows how to "package" your file and understands the ins/outs of commission sales.

Best of luck!
Jim
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October 07 2013
The loan officer will need to evaluate the tax returns to determine your adjusted gross income.
He or she will take into account any un-reimbursed business expenses which will be subtracted from the gross income. 

Typically commission income must be averaged over the previous two years for an FHA mortgage.  To qualify commission income, the borrower must provide copies of signed tax returns for the last two years and the most recent paystubs.

I would strongly suggest that you meet with a local licensed lender to start the pre-approval process. 

Good luck.

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October 14 2013
Hello

.[self promotion deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]


William Allen
Mortgage Banker
Proficio Mortgage Ventures, LLC
a wholly owned subsidiary of Proficio Bank
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October 10 2013
You should be fine in this scenario especially if the commissions have increased. More than likely we would take a two year average and being in the same line of work his employer change should not hurt him. Feel free to contact me to discuss your situation.
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October 10 2013
Either you are self employed, an hourly/salary wage earner or you get paid on commissions. I don't care if you sold toasters then moved into auto sales. A good Loan Officer can make the case to their Underwriter based on a 24 month work history rather than ONLY looking at the previous two years 1040s. It doesn't matter if you worked one job for ten years or have only been working at your current job for 12 months, as long as you have a 2 year commission history, you're a good to go (depending on what lender/loan officer you go to that is).

Best of Luck!
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October 10 2013
It will all boil down to the tax returns. The work history is not problem...have a good FHA LO in your area review 11/12 returns/YTD earnings to correctly calculate the income and you should be fine. This may be over some LO's knowledge level, so you may need to speak with more than one to get it done correctly. Unreimbursed business expenses are popular in that line of work, and that will affect how much you qualify for. Anyone that tells you the loan can be done without first reviewing your tax returns is not who you want to deal with....
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October 09 2013
To answer the first question not a problem as far as a 2 year work history with in the same industry and commission income, and with your income increasing we would take an average of 2012 and his year to date for qualification purposes. I would also advise you to take a look other loan options if your credit is satisfactory 680+, because if you are looking at FHA with 3.5% down vs. conventional 5%, coming up with that additional 1.5% could increase your purchasing power by 15-20k all the while keeping your payment the same or within a few dollars of the FHA. Also the average home in your area has been appreciating over the last few years and will continue to do so ( average of 4.2%) meaning you would be able to request your Monthly Mortgage insurance be removed from your loan after roughly 4 years reducing your mortgage payment for the rest of the term to just principal and interest. As you probably know with FHA you are now required to pay the Monthly mortgage insurance policy for the life of the loan plus the 1.75% upfront fee ( which is more than the 1.5% to go conventional) One other nugget of information some or all of the 5% down can come from gifted funds and the mortgage insurance companies are now following suite and making Monthly MI very affordable. I would love to discuss this with you in more detail, and make sure that FHA is the right fit for you. Just FYI We do lend in Idaho, and we could let you know what you are  pre-approved for  and ready to purchase ASAP!!!! I hope this helps 

Good luck, and hope to talk with you soon, 

-Mark
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October 08 2013
2 years with different similar jobs should be fine.
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October 08 2013
Yes, that will work for documenting 2 years income.  I would apply right away to have your loan officer review your tax returns and give you an idea what your maximum loan amount will be.
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October 08 2013
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Houses In Ohio are so cheap you should able to buy it all cash if he work one full month.
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October 07 2013
get started on a pre approval with a local lender to find out for certain
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October 07 2013
This will still work for 2 years of commission income.  He does not need to be at the same place for 2 years.  Good luck
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October 07 2013
 
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