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Using Your Pay Stub to Buy a House

The current state of our economy has left many people wondering if they will be able to successfully apply for a mortgage. In truth banks and mortgage companies are not as willing as they once were to approve loans. Just a couple of years ago it seemed like anyone could get a mortgage, today more banks are sitting on repossessed homes that at any time in recent history and as long as you still have a good credit score and can provide a copy of your most recent pay stub document or form showing proof of income, you can still get a mortgage.

What Your Pay Stub Document or Form Should Show

As long as you are employed by someone other than yourself you should get a pay stub printed as a form at the end of each pay period. Next to your paycheck itself, your paystub is probably the most important piece of paper you are likely to get. This single piece of paper will provide proof of how many hours you work each pay period, this includes both regular and overtime hours. When added together this figure is your gross pay for the period.

Below your gross pay, your pay stub will show every deduction that has been taken out. These generally start with federal income taxes and then go on to include Social Security and Medicare taxes as these are mandatory deduction. If you have any state and local taxes these should also be shown. In many cases people have retirement funds including 401K IRAs and health insurance payments which are taken out before taxes. All of these deductions should be shown and then the amount that is left over or your net pay is the last number.

Why Do Banks Need This Information?

If you are applying for any kind of loan you must be able to provide the lender with both proof of income and that you have been on the job for a lengthy period of time. Your pay stub record or form shows them how much you actually make in a given pay period and if you have kept your stubs in a file you will have proof of job stability.

If you are serious about wanting to buy a house then you are going to need to provide the bank or finance company with proof of your income. Once you have proven that you have the income to support a mortgage and couple it with a decent credit record you might be surprised to find that the bank is willing to take a chance and lend you the money to buy your dream home.

 

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