Investor's Loan Guide by Graham W. Parham

Why is Mortgage Lending so Difficult These Days?
My wife and I are both salaried employees. Why can’t we you use
her income?
Although she is employed in the same line of work for many years, she
has been out of the workforce for more than 12 months. We would have to
have her on the new job for the last 12 months before her income to be
counted. Yes, even if it is a salary and will have continuation; she still has to be
there for a minimum of 12 months.
What about my secondary job or my side business?
Yes, we can use both, if you have been doing those jobs for over two
years and it is reported on the tax returns. This side business would typically be
reported on Schedule C on the tax returns. All Schedule C income typically will
have income and expenses. We always take the net-net between the two and
if it is a positive number we will give you credit for that business. The net-net
number will be averaged from the last two years only if the last year is higher
than the previous year. If the last year is lower than the previous year, we will
only give you the lower number from the previous year’s net-net earnings.
As far as the second job is concerned, you would have to have been on
the job for at least two years or more; we will average that income over the
last two years. Anything less than two years will not be counted.
Any additional income that is represented on the 1040 tax returns
regardless of what schedule it shows up on, we will always average the last
two years. This includes dividend interest, capital gains, and oil and gas
royalties. These items are typically shown on Schedules A & B.
I have a strong W-2- salary and my wife has her own business and
reports her earnings as a self-employed individual. Should I use her
on the loan application?
41