Part-Time Pay May Not Count When Seeking A Mortgage


It’s an issue that hasn’t gotten much attention but should be a red alert for first-time buyers and others who supplement their incomes with part-time work: Though part-time earnings are playing an increasingly important role in the post-recession American economy, the income you earn part time may not count when you buy a house.

Isn’t income always income? If you make $42,000 from your regular full-time job and $18,000 more by working part time at a second job, isn’t your gross income $60,000?

The IRS would tell you it is. But mortgage lenders may disregard the $18,000 unless you can document that you’ve been receiving the extra money steadily for two years and the pay is likely to continue.

There might be some wiggle room on this depending on your specific circumstances, but under rules established by the dominant players in the home loan market — Fannie Mae, Freddie Mac and the Federal Housing Administration — part-time income generally isn’t “qualifying income” for mortgage purposes until it has been flowing for a couple of years.

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