Can previously low wages hurt my chances of an approved home loan?
Some quick stats about me.
- Received a pre-approval for $280,000
- Credit Score: 808
- Current Salary: $63,500
- Job: Junior Software Engineer
My main concern here is regarding the eventual income verification step of the final loan approval process.
I am very new in my career field and have worked as a Software Engineer for less than a year (9 months). Prior to that I have worked very low paying retail jobs while learning to code.
So my wages for the last two years were:
- 2017: $22,360
- 2016: $30,500
So despite my current pay stubs reflecting my current salary of $63,500, will the last two years W-2s impact my chance at getting a loan approved?
Depending on the lender’s criteria to evaluate prospective borrowers, one parameter in general is job stability, which in your case is 9 months, a slightly low figure. However, most probably it has been taken into consideration by the institution at the pre-approval stage, which also would have taken into consideration your current salary and EMI payout (Equated Monthly Installment) for the loan and that the EMI does not exceed a certain percentage of your take home (depending of course the established norms and regulations). So, the income verification is to ascertain that you get what you have declared; your earlier salary will have no impact on the loan limit. In other words the lender has already profiled you into a borrower bucket; your earlier salary will not change that bucket.