How Much Mortgage Can I Qualify For? It Might Depend On HOW You Are Paid!

Cash, income, credit history…the big three of getting an approved home loan. All equally important and all have very specific guidelines and documentation requirements. We mostly think of income when asking the question, “How much mortgage can I qualify for?”  This article is going to talk about income and why HOW your wages are paid  by your employer can make a huge difference in the amount of the mortgage you may be eligible to borrow. There are many methods of employment compensation. Just to name a few: Hourly Hourly with overtime Hourly with bonus Salary Salary with bonus Salary with commission Straight commission Wage paid by your own company (or family business) Ultimately what your lender wants to establish is the stability and consistency of your income. If you work a standard 40-hour week and are paid hourly or on a set salary; that’s the easy part and is fairly … Continue reading

Is Using Your 401K For Down Payment A Good Idea?

Your employer based 401K retirement plan may have an option for you to take out a loan against all, or a certain portion, of the account for “hardship” reasons.  Using your 401K for down payment on a home is considered a “hardship” reason. What is a 401K Loan? A 401K loan is money that may be available to you based on certain conditions of your 401K retirement plan offered by your employer.  The interest rate charged is typically lower than if you borrowed money from a bank.  Since it is secured money. That means the collateral for the loan is your 401K. Your mortgage lender will allow it to be used for down payment requirements on a new home purchase. (see video below for further discussion on “secured” loans) Is it a good idea?  The answer is it depends.  The first step is to discuss the terms with the administrator … Continue reading