Qualifying for a Mortgage on Part-Time Income?
Today, it's more common than ever for individuals to make a living by working one or more part-time jobs instead of a traditional 9-to-5, 40-hour-a-week job. The assumption is that most people that choose part-time over full-time are either retired individuals or college students. However, that's is not the case! The Bureau of Labor Statistics states that over 32 million Americans work less than 34 hours a week – the commonly accepted cut-off for part-time employment.
As you can see, part-time employment doesn’t always mean 10-20 hours a week. Often, it may mean working close to full-time hours and perhaps even earning full-time pay too!
The good news is that if you work two or more part-time jobs and earn close to full-time income, you stand an excellent chance of getting a mortgage the same as a home buyer who works one full-time job! But there are some differences with how mortgage lenders consider your application. Read below to find out more.
Qualifying for a Mortgage with Part-Time Work?
No matter how many jobs you have or how many hours you work, lenders always begin with a review your work history and income. In short, yes it is possible to qualify for a mortgage on work part-time alone. The primary qualifier is not how many hours you work, but rather on income and work history.
Documentation Makes a Difference
Lenders ask for documentation of income and work history in all cases. However, if you work part-time in addition to a full-time, you may be asked to provide additional documentation. Usually, lenders want to see that you've been at your part-time employment about two years before it will count towards mortgage-qualifying income.
Lenders do this because they want to make sure that they base your loan application on an accurate picture of your income, not just a temporary bump in total household income from part-time work in addition to regular full-time employment.
Lenders also gauge whether this workload is sustainable – essentially looking at whether you can work a full-time and part-time job for long term. If your mortgage is based on a high workload that is not sustainable, your lender will be concerned about your inability to make payments if you drop the part-time job.
If you only work one part time job though, you may not need to provide additional documentation. As long as it generates the income necessary to satisfy the lender’s income requirements and they've determined that the income is stable, they will receive your application the same
Part-time work does not need to discount the dream of home ownership. If you work part-time – whether that’s one part-time job, several part-time jobs or part-time work in addition to full-time – home ownership is possible!
Call us today to learn more about the application process for part-time workers and let our experience help qualify with a lender today!