What happens if you get transferred, your partner hasn’t yet found a job in the new location, but you need both incomes to qualify for a mortgage?  The lender will use what’s called “trailing borrower” income.  A trailing borrower can be anyone who has lived with the borrower before and will be living with them again.  It used to be only a spouse, then Fannie Mae decided to get real and open it up to fiancee, same sex partner, or even a parent that will be moving and living with the borrower.

Your co-borrower must prove employment and income from a job in the location he/she is leaving. The lender will take up to 100% of the income, as long as it’s not more than 33% of the total income needed to qualify.  

Tom and his Mom are moving to Phoenix. Tom is the primary borrower, but they still need the Mom’s income to qualify. Mom works as a hotel manager in Albany, New York, making 36,000 a year.  She can find a similar job with the same income once she gets to Phoenix.  Tom makes 3,000 a month, but they need to show 4,000 a month to qualify for the loan. They can use 1,000 a month for the mother’s potential income and it will be 25% of the total needed. So, the numbers work. Did I confuse you more? 

Other qualifications include: 

•      The co-borrower must prove 2 years of continuous employment in the old location

•      The co-borrower must provide a statement of intent that he/she will seek employment in the new location

•      The job market and salaries in the new location must be comparable to the old one (the lender will check on line employment/income sites)

•    You must have 6 months of housing expenses left over after closing, just in case they do not get a job right away     

•   You should have a FICO score of 680 plus

 Note:  Your trailing borrower cannot be self-employed, otherwise why wouldn’t they be taking the business along?

This stuff is not new, just refined along with everything we know. 

Dale Siegel