Thursday, October 15, 2009

Seasonal Work - Can You Use it to Qualify for a Loan?

As the holidays approach, there will be questions about whether income from seasonal employment can be used to qualify for a mortgage. Here are the rules:

• The borrower must have worked in the same job, or in the same line of seasonal work, for the past two years.
• The borrower's employer must confirm that there is a reasonable expectation that the borrower will be rehired for the next season.
• The income is then averaged over the past two years.

Super important bonus tip: Make sure the lender involved in your transactions is re-disclosing the Truth-in-Lending disclosure (the TIL) whenever the annual percentage rate (APR) changes. If the APR on the most recently disclosed TIL is not within 0.125% of the APR on the final TIL signed at closing, the loan cannot close until 3 days after the correct APR has been disclosed. This is a federal regulation (it's part of the Truth-in-Lending Act).

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