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Relocating and buying a house simultaneously - How to handle pre-approval on fluctuating yearly income?

Personal Finance & Money Asked by LasEspuelas on November 5, 2020

The background is as follows. We are currently renting and want to buy our first home as we are relocating for a new job. My new job starts 1st June 2013. My current job ends May 31st 2013. My yearly income is going to fluctuate as follows:

March – 91K

April,May – 71K

June – 105K

Upon learning this my lender of choice says there might be a problem in getting me pre-approved based on either the 91K or the 105K. Or to get me pre-approved at all (not clear yet, trying to clarify this point). Now I am looking at the prospect of talking to other lenders and I am thinking that it is in my best interest not to disclose my future salary changes at all? If they are going to consider a decrease in salary as important in the pre-approval process but not an increase, then I am at a clear disadvantage. I am starting to think that I should rent for a period in my new town before moving. Can anyone suggest a possible solution to this conundrum?

One Answer

Assuming the numbers you gave are forecasted 2013 annual income, you should really use an average and give the lender 1 number, as long as you can provide documentation to back it up. Lenders aren't as sophisticated as considering your monthly income fluctuations into their underwriting algorithm.

If you're not tied down to your existing lender, I highly recommend you to shop around. There isn't an "universal lending requirement". You'll be surprised at how flexible they are. Not as a recommendation to get around the rules, but just finding a lender that'll work with your situation. Try personal finance forums such as FatWallet or Slickdeal to find low-cost lenders: Slickdeals

Correct answer by Ray Shan on November 5, 2020

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