Do I Need a Pay-Stub Before I Can Buy a New Home?

Starting a new job is an exciting milestone, and if you’re also looking to buy a new home, you might wonder if you need a pay-stub before proceeding. The answer is a bit nuanced, so let’s dive into the details.

Why Lenders Require Proof of Income

Lenders need to verify your income to ensure you can afford the mortgage payments. Pay-stubs are a common way to provide this proof, but they are not the only method. Here’s what you need to know:

Acceptable Proof of Income

1. Offer Letter: If you haven’t received a pay-stub yet, your job offer letter can serve as proof of income. This letter should include details about your salary, job title, and start date.
2. Employment Verification: Some lenders may contact your employer directly to verify your employment status and income.
3. Bank Statements: Once you start receiving paychecks, providing bank statements showing direct deposits from your employer can also be helpful.

Timing Matters

Lenders typically prefer to see stable income over a certain period. If you’ve just started a new job, some lenders might require a few pay-stubs to establish this stability. However, if your new job is in the same field with a similar or higher income, lenders might be more flexible.

Self-Employed or Contract Workers

If you are self-employed or working on a contract basis, the requirements can be different. Lenders usually look for a longer history of income, often two years of tax returns, to verify your ability to repay the loan.

Special Considerations

• Down Payment: A larger down payment might make lenders more comfortable with your employment situation.
• Credit Score: A strong credit score can also positively influence a lender’s decision.

Final Thoughts

While a pay-stub is a common form of income verification, it’s not the only way to prove your financial stability when buying a new home. An offer letter, employment verification, and bank statements can also be used. The key is to communicate with your lender and provide the necessary documentation they require.

For personalized advice and assistance with your home-buying journey, contact Michael Dorosko at Atlantic Mortgage & Finance Corporation at 352-397-4000 or visit our website.

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