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Income determination question

So, I understand that income from the last two years is taken into account when applying for a mortgage preapproval, etc. My question is, are W2s the only method by which income is calculated? I ask because my situation is this: My income for June 2007 - June 2009 is significantly higher than my W2 reported income for FY2007 and FY2008. I started a well-paying job in June 2007, but did not have it for the first half of 2007. Is there any way to use the June 2007 - June 2009 period instead of, or in addition to, just the W2 evidence? Any insight is appreciated. by dgall1_260_226 from Sugar Land, Texas. Sep 23rd 2011 Reply


SONNY BAKER (sonny@bedrocklending.com)
#76 ranked lender in Texas - 10 contributions

2007 income will not even come in to play today- we go off the last 2 years- so to qualify we will use your year to date in 2011 going back to years to 2010 and 2009please feel free to call us at 866-445-3765 and a loan consultant can assist you further

Sep 23rd 2011
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,722 contributions

Only income from your most recent 2 years tax returns and w2's will be considered... so 2009 and 2010 are the only years to be considered in your example... if your income has declined from 09 to 10, then the lender will use the lower income of both years... if your income has increased from 09 to 10, they will take the 2 year average... If your like most Americans, we all made more money in 07 to 09, but lending decisions are based on your ability to repay with the income you have right now, supported by what you made in the nearest past... income from 3 to 4 years ago will never be considered... WilliamAcres.com

Sep 23rd 2011
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Brian French (bfrench)
#11 ranked lender in Arkansas - 52 contributions

Agree with my colleagues' assessment. We would require 2009, 2010 W-2's, Tax returns, and the most recent 30 day's worth of pay stubs to validate income.

Sep 24th 2011
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