Annual Income & Over-Time

Yeah but Sammy, considering the employment situation, wouldn't you want to be on the conservative side yourself?

Huntersburg, I agree about being conservative but lenders factor that into the DTI calc. My problem is that because I am not being given credit for 35% of what I make, my DTI is artificially inflated. I don't intend to purchase beyond my means, by any means.

Lenders are being extra, extra cautious...I think the underwriter could argue that the company could cut your overtime anytime and then your dti would be high.

What you're being told is accurate. The lenders look at it now that you are self employed and being self employed (based on old underwriting thinking) is more risky than a W2 type of employment. Depending on what you are buying there are still options out there around this -- they will carry different caveats but still might accomplish what you are trying to do.

Actually, my "overtime" equals the same amount as what I would have made in "bonus" last year at a bank. I understand that the lenders have to be conservative, but is this how they treat bonus eligible employees also? Because when I worked at a bank as a full time employee (FTE), my bonuses varied from year to year, would they have asked me to show 2 years of bonus history too in that case? Or only considered my base salary? The fact is (& I know everybody here knows this already), post financial crisis, firms/banks do not want to hire FTE but rather have "contractors" do the same work usually for the same pay. What the employers save on, are the benefits & other costs associated with FTE and "contractors" make the same amount of $$$. In fact, in my situation I have employer provided health benefits & a 401K; I'm doing the same stuff I did on Wall Street but now in a much more stable industry for a Fortune 500 company.

Aceltis-What other options could there be??

You might have to look at condos only; co-ops are much more strict than the banks.

What you said is right -- bonus income needs to be averaged over a 2 year period and then added to the base income to get the full income picture. You would have been asked to provide your bonus for 2 years so the U/W (underwriters) could calculate your bonus income average. It's a bit much to write here and also for compliance reasons I would prefer to discuss this with you over the phone and throw some ideas your way for you to think about. Let me know if that's ok.

I think there is definitely a squeeze Sammy. So if buying is more difficult as more people are losing jobs or becoming outsourced contractors, are landlords being more flexible about their tenant's financials?

jecohen: i am looking only @ condos. right now i'm just trying to secure financing & dealing with this issue with the lender.

What you said is correct -- if you were still employed as a full time employee you would have to show 2 years of bonus income to qualify it and it would be averaged over two years. Thus, if you made $10,000 in bonus one year and $100,000 the next year your bonus income would be $55,000 plus your salary. I would need further information to make an accurate analysis of your situation. But, some food for thought would be as follows. An FHA manual underwrite may allow for the less than one year being self employed. There may be a few other outlets I know that have non traditional guidelines that would make an exception and allow you be approved.

Aceltis-how do i discuss this further w/ u??

miwarnock-I do not know about renting. I have been in a rent-stablized situation for 16+ years in Midtown. Love my place (a luxury hi-rise), pay next to nothing for it & had always planned to live & die there. Unfortunately, family situation has changed over the past year & need to move to a bigger place. Based on my analysis: it makes more sense to buy in today's market, rather than rent.

Sammy300 - Search for my contact info on the web, I don't believe I can post it here. Google ought to help!

>pay next to nothing for it & had always planned to live & die there. Unfortunately, family situation has changed over the past year & need to move to a bigger place.

Giving up a rent stabilized place? Have you considered giving up the family?

Just kidding.

Google "Aceltis"

Huntersburg - No you're not kidding. (Un)Fortunately, I don't share your values as I was not born & raised in this country.

sammy300- be resourceful to find my info, I cannot advertise here. Hope we talk!

sammy300 - be resourceful!

Americans have different values than people born elsewhere?