Nothing can be closer to the truth when it comes to getting veteran loans when you buy a home than being able to prove your employment and your income. Said in another way, if you are getting income for doing some side plumbing or electrical work for a local contractor for example but you are getting paid under the table unless you file and pay taxes on it you won’t be able to use it to qualify for a mortgage.
It is especially important to keep this in mind in today’s economy when so many of us are doing what we can to make extra money to make ends meet and sometimes we get paid cash for jobs we do.
In general, to qualify for a VA mortgage (which is different than qualifying for an IRRRL), the VA wants to see 2 years of verifiable employment and income. As you go through the VA mortgage application process, your mortgage lender will most likely ask you for your last two years of W2’s and possibly your last 2 years of tax returns. They are also going to contact your employer to verify your employment history as well as your income. You don’t have to had worked for the same employer for the past two years, you just ought to be able to prove your employment.
Be ready to also provide your latest 30 days worth (most recent month) of pay stubs to show at least a 30 day pay period (this could mean that you need to show your last two pay stubs) and year to date income and tax totals. One thing to take note of in the event that you are planning on changing jobs while you are trying to get your VA mortgage. If this is the case, make sure you give yourself ample time to get your new income established with your new job so that you can show your new job’s 30 day income history. It is not a good idea to try to slide by this, because mortgage lenders are very good at verifying income and employment – especially near the time when you are supposed to close your mortgage.
If you are planning on making a job change, tell your loan officer about it so they can plan for it and advise not only you on your actions, but to also give the underwriter a heads up. The last thing you want to do is to surprise your underwriter. The midnight hour is not the time to have your lender find out that you no longer work at the employer that is listed on your mortgage application. This could delay your loan closing 30 days more depending on your payment cycle and hiring status at the new job.
One last note: if you are self employed you can qualify for and get a VA loan. Your loan application and income will depend greatly on your tax returns and your bank statements. Remember how we started off this post – if you can prove it for a period covering at least two years then the lender can probably count it.
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