Income Qualifications For Mortgage Loans

Two years worth of w2 s and the most 30 days recent paycheck stubs is what most.

Income qualifications for mortgage loans. However that type of income cannot be used as income for mortgage loan qualifications. Fha loans va loans and even conventional loans with an ltv higher than 80 have the backing of the mortgage insurance that ensures the lender that they will be paid should the buyer default. W2 income is the best source of income that is acceptable. Use this mortgage income qualification calculator to determine the required income for the amount you want to borrow.

It includes bill payment history and the number of outstanding debts in comparison to the borrower s income. Borrowers who are full time wage earners with full time income get w2 s at the end of the year. The higher the borrower s credit score the easier it is to obtain a loan or to pre qualify for a mortgage. If a mix of social security or pension payments plus other monthly income gives you enough dollars each month to fall under that 43 percent threshold you have as good a chance as anyone of qualifying for a mortgage loan assuming that your credit score and other factors are solid.

As a rule of thumb mortgage lenders don t want to see you spending more than 36 percent of your monthly pre tax income on debt payments or other obligations including the mortgage you are seeking. If your income is lower than this you may need to do one of the following. Look for a cheaper home save a higher downpayment or look for a lender which will lend to higher dti limits. A good rule of thumb is that income not shown on tax returns or not yet claimed will likely not be considered in your mortgage qualification calculations.

That s the general rule though they may go to 41 percent or higher for a borrower with good or excellent credit. If your monthly income is higher than 5 225 06 or your annual income is above 62 700 68 you should qualify. Debt to income calculations many mortgage lenders rely on a debt to income dti calculation to assess your ability to pay for a loan. 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.

For example fannie mae requires that a borrower s dti can t exceed 36 percent of their stable monthly income. Calculations are made using the current interest rate monthly debt payments and other important variables. If the borrower routinely pays bills late then a lower credit score is expected.