Tulsa Mortgage : Podcast 22 – Part 2
So I am a W-2 employee. I work at the Kwik Trip, which is a convenience store. I worked there for two years. Not only did I receive my hourly pay of $15 an hour, but I also get a store bonus. Yes. Can I use it Tulsa Mortgage?
Steve: Why, what do you mean maybe?
Steve: What does it depend upon?
Tulsa Mortgage Tyler: Are you going to get it next year?
Steve: Is it likely to continue? I mean I got it the last two years.
Tyler: Are you sure? Has it been two years?
Steve: Yes, I’ve been here two years and every December I get a bonus. A store bonus. Because the store does well and I am really good at my job, and they give me a bonus. Can I use it?
Tyler: Probably going to depend on the verification of employment.
Tulsa Mortgage Steve: Man all these factors Tyler. Gosh it gets so hairy. Because why? Because okay, yes, you did receive the bonus the last two years, but your employer has to put on your verification of employment that bonus or overtime is likely to continue. It’s stupid. It’s one little box. They have to check “Yes”.
Tyler: Well, here’s a prime example of the environment we’re in—
Steve: [sings] Check “Yes” or “No”. Was that good?
Tyler: That was great.
Steve: Sorry, go ahead.
Tyler: It’s beautiful.
Steve: Tyler’s going to break it down for sure right now.
Tyler: What about the oil field that’s going through such a hard time right now?
Steve: Oh, snap.
Tyler: They get giant bonuses, safety bonuses. They get bonuses—
[sound of explosion]
Tyler: –at the end of the year.
Steve: Tyler just dropped the bomb upon you.
Tyler: They’re probably not likely to continue right now for those that still have jobs in the oil field.
Steve: If you work in oil and gas position, you need to get a little bit of this.
Steve: Because it’s tough right now in it.
Tyler: It’s hard out there.
Steve: Unless we can discriminate based on the industry that you’re in, but it’s a real problem if you get a bonus and it maybe isn’t likely to continue. I mean, that’s really what it comes down to. It just can be a real problem. So, just because someone currently receives overtime bonus commission, it doesn’t mean it can be used to qualify. We just talked to a couple last week that– the guy sells cars. Remember him?
Steve: Well, he’s been doing it for three months. He gets a $2000 month draw, and then he gets commission and he’s making good money. Crap, he made like $10,000 last month.
Tyler: Doing great. Killing it.
Steve: For three months. Actually, two. Okay, you know, it’s commission, we have to see consistency. Let me tell you about the mortgage industry and the inconsistency in some mortgage guys that don’t even close a lot of loans consistently. And they might have a big month where they make 10 grand. They might have a low month where they make zero, right?
Steve: So, we have to figure that out. I think we missed our story time button. I don’t know, Tyler, do you see “story time” anywhere?
Tyler: It’s on there somewhere. It’s towards the end.
Steve: It is number 28.
Steve: Tyler, you tell story time. I want Tyler to tell story time to stop this time.
Tyler: Well, we kind of hit on this a little bit. So, Mr. Jones, he’s made $15 an hour at the same job for the last couple years. He got a promotion to sales. Started receiving commission for his sales about a year ago. Can he use his commission for qualification?
Steve: I don’t think so. I don’t think so in that case.
Tyler: Not in his case.
Steve: If he was receiving overtime for a year solid with the same employer then that’d be one thing.
Tyler: If it’s likely to—
Steve: If it’s likely to continue.
Tulsa Mortgage Tyler: Yes.
Steve: But if he’s not, then I’m going to have to say, “No”. But, I will tell you this – I would say, “No”, but it needs further analysis.
Steve: It needs a TBD underwrite.
[sound of explosion].
Steve: What? “To Be Determined” underwrite. So in cases like that, we just don’t question it. What we would do, Tyler, we put the file together and we submit it to tendering and we get it approved, or not. Because, I don’t want to be the one to make that– I’m pretty dod gamn [sic] smart. Wouldn’t you agree, Tyler? I’ve been doing this for a long time. But, I’m not an underwriter. I’m a sales guy, so I’m going to see the positive in just about any situation and figure out how to do it.
But, we’re just going to submit that to underwriting and get an approval and figure it out. We actually did this with the gentleman recently on the refinance. In his case, he’d only been receiving his bonus or commission income for a year at the current employer. But he made commission doing the same thing at the same company. He just had—he left went to another company also making commission, and then came back and we were able to get that done.
Everybody’s situation’s different. So don’t prejudge it and think that you just can’t get it done because some knucklehead lender told you that they can’t get it done. You need to get a second opinion. If you walked in, Tyler, and I was your doctor and you walked in and I slammed you on the knee with one of those little hammers that’s shaped like a triangle, which I don’t know why they’re shaped like a triangle – but I hit you right on your knee and I go, “You have cancer”. Do you just go home and be like, “Oh my god, I have cancer”.
Steve: What do you do?
Tyler: I’m calling somebody else.
Steve: Yes. I mean, this guy hit me on the freaking knee with the triangle hammer, and he says I’ve cancer. I’m going to get a second opinion. So, it’s a same thing with your mortgage. If you get somebody that says, “You can’t qualify, I can’t count that income. That won’t work”, then what’s the best thing to do, Tyler?
Tulsa Mortgage Tyler: Second opinion.
Steve: Call stevecarrington.com. Unless it’s stevecarrington.com that told you that, then count yourself lucky that you got to talk to me. No one else will be able to get you approved if I can’t. I’m just kidding. Look, everybody’s different. Everybody’s got different guidelines that they underwrite to, and what I mean by that is we all kind of work from the same book. But some people are more strict than others. Some people interpret things more conservatively, and some people look at things as a glass half empty, and some look it as a glass half full. I happen to look it glass half full, so you have got to find a lender that’s going to look at something as a half full glass and not a half empty glass. And then I think you’ll be pretty dod gamn [sic] happy with your experience.
Make sure that if you’re W2-ed, if you are a hourly salary employee, that you’re getting that information upfront to your lender, so that they can make a determination on your income. Otherwise, we’ll have to play this in-your-ear constantly.
Steve: That’s really loud. I thought when I hit it the second time, that would make it stop. But it didn’t make it stop. So, recap that for me Tyler, how am I documenting my W2 income?
Tulsa Mortgage Tyler: Well, you document it with your W2s. You document it with your tax returns.
Steve: With your pay stubs.
Tyler: Yes, pay stubs.
Steve: So, we’re talking about base income overtime bonus commission. If any of those play into your income – look, it’s great if you just get a salary of $200,000 a year, and you have an 800 credit score and you put a 20% down that’s easy. Anyone can do that. When you have something special with your income, which a lot of people do– let’s say you’re at RN or an LPN. What’s different about an LPN’s income?
Tyler: Shift inferential?
Steve: Oh, they get a shift inferential. So, there’s lots of stuff that can into, based on the industry, based on who you are and what you do. Just make sure that you don’t just make assumptions on what it is that you make. Get with the good Tulsa mortgage lender, or a good Alamosa mortgage lender, or a good Colorado Springs mortgage lender. And make sure that they calculate that income ahead of time, so that you don’t have–
Steve: –waiting on your loan approval. That’s Steve Carrington from the Steve ‘n Tyler Show, and we’re signing off. See you.