Income For Mortgage Qualification

Types of investment income that can be used for mortgage qualification.

Income for mortgage qualification. Using the example figures provided you ll essentially be saying if i m covering a mortgage payment of 1 000 property taxes of 2 200 per year 400 in annual insurance costs 300 in monthly debt obligations and i wanted to buy a 175 000 home with a 10 000 down payment 165 000 loan amount how much income will i need to handle all of these costs. Your income can be proved easily through an employment letter and recent pay stubs. If your monthly income is higher than 5 225 06 or your annual income is above 62 700 68 you should qualify. Many lenders used to offer what s known as stated income mortgages where all a borrower had to do was state their income and the mortgage would be based on.

Realized capital gains are viewed as too volatile to rely on. As long as you can meet this threshold you should be. If your retirement includes savings in an ira 401 k or other retirement accounts you can use it as income to qualify for a mortgage. How does rental income affect mortgage qualification.

Look for a cheaper home save a higher downpayment or look for a lender which will lend to higher dti limits. You may wish to take that into account when considering your own situation. Typically there are only two forms of investment income that can be used for mortgage qualification dividends and interest. Today we need to see proof of any income you plan to use to qualify for a mortgage secondly no matter what income streams you use most lenders want your total monthly debts including your estimated new mortgage payments to equal no more than 43 percent of your gross monthly income.

Having income from a long term salaried position is the easiest way to qualify for a mortgage. However borrowers with excellent credit and healthy financial reserves can often exceed those guidelines going as high as 41 percent of gross monthly income for mortgage payments and debt obligations combined. Like the income requirements the requirements for a borrower s debt to income ratio or dti are not set in stone according to fannie mae s. Ordinarily the only investment income that is usable in qualifying for a mortgage is interest and dividends and these may be discounted depending on the source.

Those are the base guidelines. Debt to income ratio to qualify for a mortgage. If your income is lower than this you may need to do one of the following.