How do you get paid? Salary, hourly, commission? Does it matter for a real estate purchase? YES!
1:19 – A story from Aric about a buyer who wanted to change jobs mid transactions. The lender needs to know security — keep the unknowns to a minimum to keep your transaction alive.
3:32 – How’s the lender see it? A lender is a professional risk manager. They want to make sure a buyer is going to repay. They do that by verifying income. What you want is a “Non-Contingent Contract” for employment from the employer. It will work just fine because the lender is basing the lending decision on a binding contract. But no contingencies (drug test, certifications, etc) is hard to come by — employers don’t want to offer it.
5:39 – What if you go from salary pay to hourly pay? Variable pay creates challenges for the lender because it’s MUCH harder to verify variable pay. That’s why you may need 2 years of pay stubs to verify what you’re likely to be paid in the future. Seasonal work (like construction) fluctuates, and it’s tough to verify.
7:55 – If you’re looking at buying a home and you’re thinking about switching jobs, TALK TO YOUR LENDER AND YOUR AGENT.
8:27 – Jason shares a story about mortgage fraud…it’s just up to 30 years in prison and a $1 million fine.
9:32 – You can still change your job, but be smart about it and have a plan! If it’s gonna be two years of pay stubs to get a house, talk to an agent. Let’s talk about alternative structures for purchase. We all want you to get a home.
11:09 – Let’s talk about each of the pay methods: salary, hourly, commission, etc. Salary is predictable and low volatility. Bonuses may require additional verification.
12:10 – Hourly pay convolutes things a little…because you might be “variable” not just “hourly.” You know you’re “variable” if you don’t work the exact same number of hours from week to week.
12:59 – Commission stretches things out…a lot. Commission, bonuses, variable, piece rate, etc — they all require additional verification because they’re less reliable incomes than straight salary. Your lender is likely to ask you for 2 years of history. Lenders don’t look at just the last 6 months, they’re looking at the next 30 years!
14:30 – Rules that surfaced in 2008 are designed to help all buyers accurately represent their income posture and avoid the kinds of situations that brought down the economy. COVID tightened things more as well.
15:20 – Self employed can actually be easier than other forms of income — taxes are really easy to account for. Show history.
17:15 – Fixed income changes the game as well, but it doesn’t mean you can’t buy a house. Get the “awards” letter from Social Security or the Pension. Just prove that it’s going to continue.
18:45 – Plan ahead. If you’ve got a special situation, talk to a lender. They’ll help you.
19:40 – Making non fraudulent statements during signing.
20:20 – What’d we learn today?
22:06 – Bloopers
23:13 – I want you to watch me. I need you to watch me!
*No paychecks were harmed in the filming of this real estate discussion.
Please contact us to tell us you love us, you want to hire us! Call or text:
Realtors with Hive Collective at Presidio Real Estate:
Tyler Cazier: 801-210-0230
Aric Wiszt: 801-228-7687
Lender with Elite Team at Security Home Mortgage:
NMLS: 178787
Jason Christiansen: 801-669-7271
NMLS: 240472
A Production with Security Home Mortgage’s Jason Christiansen, and Hive Collective at Presidio’s Tyler Cazier and “Mr. Suit” Aric Wiszt.