How we qualify you
Most loan files are built for someone with a flat salary and a two-line pay stub. If your income arrives as base pay plus overtime, or you show occasional layoffs/breaks between jobsites, the standard process tends to average income down until the number on paper looks nothing like your actual take home.
At Blue Collar Approved, we fully understand how the blue-collar industry pays. We know how to get the most out of your income qualification and communicate it to an underwriter. For a longer look at how blue-collar pay is documented, read Getting a mortgage with a blue-collar paycheck.
What we look at
- Overtime and shift differentials. Underwriters generally want to see a history before overtime counts toward qualifying income. We help you assemble that history and present it clearly rather than letting it be averaged away.
- Union scale and contract raises. Most lenders average your income over 24 months when your year to date doesn't match your current rate of pay. We don't do that! We document your contract raises or apprenticeship raises and use your new, higher pay rate to qualify you for your mortgage, so you aren't undercut using last year's hourly rate.
- Per diem/sub pay/travel pay. Most of the time, this income is non-taxable, which means you cannot use it to qualify for a mortgage. Some inexperienced loan officers may not know this, and it can run you into trouble during the mortgage process. It's important to use a lender that understands what's allowed by underwriting guidelines.
- Occasional layoffs/breaks between jobsites. Down time between jobsites is common in the trades. We can still utilize your full earning potential! It needs a written explanation and supporting history, not an apology.
What we need from you
The list is shorter than most people expect. Generally: recent pay stubs, the last pay stub received in December of last year (to show your overtime breakdown), and bank statements. If you are union, your local's contract raise records often fill gaps that would otherwise stall a file.
We will tell you at the time of application what your particular situation requires, so you are not producing documents one at a time over six weeks. Answers to common questions about documents and timing are in the FAQ.
What happens next
We review what you send and give you a straight answer about where you stand and what, if anything, needs to change first. If the answer is that waiting a few months puts you in a materially better position, we will say so. Knowing your number a year out is often worth more than rushing an application today.