First Time Home Buyer: Income

A challenge frequently faced by First Time Home Buyers is the ability to prove sufficient income. Typically, a younger adult or couple will wait until they have their first “real” job after college. In other cases, these individuals may have waited until they receive a more stable managerial role with their existing company. In cases such as these, as soon as the increased income arrives, the individual or couple feels that it is now time to find a home. Well, they are right. As those of in my Inner Circle will tell you, 75% of those who are renting would benefit more from buying a home now rather than later.

The problem with individuals like this is that income may be hard to prove. Here are some things to keep in mind if you or someone you know is in this situation:

30 Days income is crucial to prove. In most cases, don’t plan on closing on a new home until you can prove 30 days at the higher pay level.

1. A Contract or Working Agreement is helpful. In many cases, a simple letter from your employer or HR representative will demonstrate your stability.
2. If recently graduated, expect your transcripts to be required. If you are working in a field related to your degree, it is helpful to have your transcripts as proof that you were being productive even if your income was lower.
3. Bank Statements may help. In many cases it is useful to show 12 months bank statements. In these cases the underwriter is looking for the average monthly deposits. If you are self-employed, work on commissions, or have a secondary income that is hard to prove this may help.

Understand that if you are purchasing your first home there may be a few extra hoops to jump through, but don’t let that discourage you. Every home owner had to buy their first home at some point. And I can tell you, in almost every case, it is better to get into a home earlier than later.

REMINDER: For information on my next First Time Home Buyer Seminar give me a call, or email me. As always, you can reach me at 801-256-0904 or jayhart@cottonwoodmtg.com