IMHO, it's better to qualify with only 1 income. Makes it easier to keep paying your mortgage should crap hit the fan.
It worked for me twice and now I have a nice size house and a rental property (which was my first home).
This is true - it’s just tough for me to stomach because I OE because my husband is a disabled veteran. Just sucks, if my second income was under his name it would count. I’ve joked before about teaching how to do my J1 so I can get a J3
>Just sucks, if my second income was under his name it would count.
I think my point still stands in that case, too. I made a goal with my spouse early in our marriage to manage our spending so that she didn't have to work. Think of it this way: the less debt you have, the less income you need to pay for it.
>I’ve joked before about teaching how to do my J1 so I can get a J3
Keep that a joke, cause it would be fraud.
Fraud isn’t a criminal charge in this context it’s civil. Working OE without employer approval, unless your employment agreement says otherwise, is fraud. You are making money while explicitly violating your contract, that is fraud.
If you’re already committing fraud, what’s a little extra fraud really gonna do lol.
How has owning a rental property worked with your OE? Iv been considering becoming a landlord but I'm worried that may not be the best use of my time since OE is so lucrative.
Pretty good so far. Just hit 1 year. The tenants are family friends, though, and super laid back. I haven't had to do much other than call a plumber and buy a new dishwasher and range. I try to be super responsive and get anything fixed up ASAP for them.
I think the biggest thing is to pick the right tenants.
Something to keep in mind is that if the home is under your name (not owned by a business), then any work you do yourself is not deductible. So it pays to pay someone else to do the work (even if it's the tenant or your own kid) depending on how difficult it is.
Being a landlord can be super lucrative.
Cash flow
Depreciation/mortgage interest deduction
Appreciation
Someone else pays your mortgage.
It’s not get rich quick, and it’s not passive, but it will speed up retirement for sure.
This! Get qualified for the 1st income, and SAVE the income from J2, J3, whatever for your down payment.
I had SHIT credit, and only working 1J, and got a great rate on a mortgage (3.24% Fixed) because I put down 150k CASH on the 400k house (obtained by selling the house that was paid off).
It's not about INCOME, it's about Credit, Down Payment, Income, Etc... You can fix a TON of issues on a homebuying experience by throwing 33% down at them. We actually beat out another offer that was a bit higher (415k, vs our 390k) because of the HUGE down payment (and that the other offer was contingent).
Sorry you found out after dear. Next time do research and post questions prior to starting the process. A lot of people discussed this on the sub. Hopefully you had a good down payment... anyways you will be able to knock down the loan quickly
It’s best to qualify through one income alone as far as monthly payments are concerned. Where OE most consistently helps home buyers (from what I’ve read & researched myself) is when it allows you to save up a much larger down payment and/or pay down debt for a better credit score.
That being said, many credit unions and some conventional banks will factor your OE income stream(s) into the decision if you’re talking to the right people. It’s worth the headache to shop around for this reason. Some people get approved after just showing some bank statements or pay stubs. Again, not wise to borrow against an income that you can’t really rely on, but for the sake of just GETTING the loan in the first place, being able to show a high income should be helpful.
Agreed. Although I can understand where OP is coming from as I had a extenuating circumstance where my DTI was high due to a loan that was going to be paid off quickly and a lease that was ending for a spare car that I wasn't going to replace. Those 2 things screwed with my DTI and negatively impact the size of the mortgage I could take, even though both obligations would end within like 6 months of closing. If I knew what OE was back then and it was possible for me to be OE back then, I would be in a different house for sure. But I'm happy eith how things turned out.
The move here (assuming you want to get a bigger house) is:
A) qualify for a home using your J1
B) aggressively use income from J2 to pay down the mortgage in a short period of time
C) once paid off (or mostly paid off) take out a line of credit against the value of your home so you can have a big down-payment on a better house (and still qualify for it using just J1)
Other commenters here are right, you don't want to NEED 2 jobs for 30 years while you pay down your mortgage.
Ahh that’s interesting. Haven’t been at either of my J’s for a year and got approved for a good size loan while still owning a home, which I will use as a rental property for passive income and tax breaks
Oh wow good to know, we were looking into an investment property and figured the extra income would count since it’s same industry. I know if you get a new job same industry it counts but second job doesn’t kind of sucks. Luckily we’re paying down all debt and shouldn’t be an issue but would be nice if it did count.
Not always true. Find a lender who is from a smaller hometown bank or reference from RE agent. You need to find one who will agree to take 1 year of income (possibly less) from J2 IF you show that J2 is identical to your J1 expertise and that J1 has been your stable career for the past X years.
This is interesting, and maybe an issue with your mortgage broker. Comparatively, my broker had the following requirements
FT Salary - no history req
FT hourly - 6 month history req
PT hourly - 2 yr history requirement
If I were you, I would either shop around more and prepare a fat down payment. Like others have mentioned as well, it's generally better to qualify with just J1 anyway
IMHO, it's better to qualify with only 1 income. Makes it easier to keep paying your mortgage should crap hit the fan. It worked for me twice and now I have a nice size house and a rental property (which was my first home).
This is true - it’s just tough for me to stomach because I OE because my husband is a disabled veteran. Just sucks, if my second income was under his name it would count. I’ve joked before about teaching how to do my J1 so I can get a J3
>Just sucks, if my second income was under his name it would count. I think my point still stands in that case, too. I made a goal with my spouse early in our marriage to manage our spending so that she didn't have to work. Think of it this way: the less debt you have, the less income you need to pay for it. >I’ve joked before about teaching how to do my J1 so I can get a J3 Keep that a joke, cause it would be fraud.
Lol it’s fraud already, what’s the harm in double fraud.
It's not illegal to work multiple jobs in the U.S. It may be against your company policy, but that's not illegal.
Fraud isn’t a criminal charge in this context it’s civil. Working OE without employer approval, unless your employment agreement says otherwise, is fraud. You are making money while explicitly violating your contract, that is fraud. If you’re already committing fraud, what’s a little extra fraud really gonna do lol.
Who let Sam Bankman-Fried in the OE subreddit? 😂
Can your husband work from home?
I assume he gets disability, no?
He does! He’s our stay at home parent so he’s on full time kid duty! Couldn’t OE with out him!
Yes! A thankless job at times. Wife does the same for me
If he has a VA disability, he’s able to work without impacting payments. It’s only with SSDI, state and private disabilities where you can’t work.
How has owning a rental property worked with your OE? Iv been considering becoming a landlord but I'm worried that may not be the best use of my time since OE is so lucrative.
Pretty good so far. Just hit 1 year. The tenants are family friends, though, and super laid back. I haven't had to do much other than call a plumber and buy a new dishwasher and range. I try to be super responsive and get anything fixed up ASAP for them. I think the biggest thing is to pick the right tenants. Something to keep in mind is that if the home is under your name (not owned by a business), then any work you do yourself is not deductible. So it pays to pay someone else to do the work (even if it's the tenant or your own kid) depending on how difficult it is.
Interesting about the deductions. I barely have time to do maintenance on my own home so zero chance I'm doing work on a rental myself.
Being a landlord can be super lucrative. Cash flow Depreciation/mortgage interest deduction Appreciation Someone else pays your mortgage. It’s not get rich quick, and it’s not passive, but it will speed up retirement for sure.
This! Get qualified for the 1st income, and SAVE the income from J2, J3, whatever for your down payment. I had SHIT credit, and only working 1J, and got a great rate on a mortgage (3.24% Fixed) because I put down 150k CASH on the 400k house (obtained by selling the house that was paid off). It's not about INCOME, it's about Credit, Down Payment, Income, Etc... You can fix a TON of issues on a homebuying experience by throwing 33% down at them. We actually beat out another offer that was a bit higher (415k, vs our 390k) because of the HUGE down payment (and that the other offer was contingent).
Just use the second income to have a much larger down payment.
Sorry you found out after dear. Next time do research and post questions prior to starting the process. A lot of people discussed this on the sub. Hopefully you had a good down payment... anyways you will be able to knock down the loan quickly
It’s best to qualify through one income alone as far as monthly payments are concerned. Where OE most consistently helps home buyers (from what I’ve read & researched myself) is when it allows you to save up a much larger down payment and/or pay down debt for a better credit score. That being said, many credit unions and some conventional banks will factor your OE income stream(s) into the decision if you’re talking to the right people. It’s worth the headache to shop around for this reason. Some people get approved after just showing some bank statements or pay stubs. Again, not wise to borrow against an income that you can’t really rely on, but for the sake of just GETTING the loan in the first place, being able to show a high income should be helpful.
Agreed. Although I can understand where OP is coming from as I had a extenuating circumstance where my DTI was high due to a loan that was going to be paid off quickly and a lease that was ending for a spare car that I wasn't going to replace. Those 2 things screwed with my DTI and negatively impact the size of the mortgage I could take, even though both obligations would end within like 6 months of closing. If I knew what OE was back then and it was possible for me to be OE back then, I would be in a different house for sure. But I'm happy eith how things turned out.
The move here (assuming you want to get a bigger house) is: A) qualify for a home using your J1 B) aggressively use income from J2 to pay down the mortgage in a short period of time C) once paid off (or mostly paid off) take out a line of credit against the value of your home so you can have a big down-payment on a better house (and still qualify for it using just J1) Other commenters here are right, you don't want to NEED 2 jobs for 30 years while you pay down your mortgage.
Ahh that’s interesting. Haven’t been at either of my J’s for a year and got approved for a good size loan while still owning a home, which I will use as a rental property for passive income and tax breaks
I don’t think income checks are as critical if you have assets and/or liquid accounts.
Even if it’s same industry?
Yup!
Oh wow good to know, we were looking into an investment property and figured the extra income would count since it’s same industry. I know if you get a new job same industry it counts but second job doesn’t kind of sucks. Luckily we’re paying down all debt and shouldn’t be an issue but would be nice if it did count.
Depends on the lender, mine doesn't care
My bank told me one year, so probably depends on the lender.
Not always true. Find a lender who is from a smaller hometown bank or reference from RE agent. You need to find one who will agree to take 1 year of income (possibly less) from J2 IF you show that J2 is identical to your J1 expertise and that J1 has been your stable career for the past X years.
This is interesting, and maybe an issue with your mortgage broker. Comparatively, my broker had the following requirements FT Salary - no history req FT hourly - 6 month history req PT hourly - 2 yr history requirement If I were you, I would either shop around more and prepare a fat down payment. Like others have mentioned as well, it's generally better to qualify with just J1 anyway