getting a mortgage

DH and I would like to buy a home by this coming winter...how ever last year I was out of work 6 months due to bedrest and maternity leave and DH lost his job and was out of work for almost 2 months...so our salaries that we filed on our tax return was about $30,000 less then we currently make. Do they approve you for a mortgage amount based on current salary or do they look at your most recent tax return for annual salary. Does this make sense?

Re: getting a mortgage

they will ask you for the last 2 years tax returns and current W2s. They will also run your credit.

Re: getting a mortgage

This was a HUGE concern of ours as well!
My FH lost his job for 6 months and was only working at his current job for a few months when we started looking at houses, and he was pre-approved for a mortgage on his own. He had to give 2 years tax return and last 2 pay stubs I believe. We eventually got pre-approved together so we could get a bigger mortgage for a bigger house.

We found a house and just had it appraised so we are waiting for the mortgage stuff to be wrapped up, but no problems so far.

Re: getting a mortgage

We had to provide the previous year's W2s and tax returns (just for one year though), and then our two most recent pay stubs.

Good luck!

Re: getting a mortgage

They look at both, but I think as long as you can explain why your salaries were lower previously they mostly base it on your current salary, as long as it’s judged to be relatively stable. I was unemployed for 6 months also, and had only been in my new job for 2 months when we applied for the mortgage…I just had to write a letter explaining why I was unemployed. I’m pretty sure it was mostly based on our current incomes, and the other stuff is just for background so they know where all our money has come from and they can determine if we are stable…can’t hurt to talk to a mortgage broker anyway—ours was great and so helpful!