Archive for December 2015

Non-Conventional Income Sources That Might Assist You To Qualify For A Mortgage

After months of keenly searching for a dream property to purchase, you are lucky enough to have just found it. Unfortunately, there is one issue you hadn’t given much thought – your monthly income is not high enough to effectively cater for the purchase. Simply put, you cannot qualify for your required mortgage loan. Or can you? Yes you probably can. While you combined income might not be high enough to help you qualify for a home loan, why don’t you consider the other streams of income that flow into your home?

From social security payments and dividend income from investments, to monthly alimony payments and disability payments, there are many different sources of income that could be flowing into your home than you ever imagined. However, there are two things you need to first realize before using your other sources of income for mortgage loans qualification purposes, including:

 

• Documentation

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First, you need to document every kind of income you hope to use so as to qualify for a mortgage loan. How so, you might ask. Well, the days of simply stating your income and not having to prove it are long gone. These days, lenders require seeing proof of income a borrower is planning to utilize so as to qualify for a mortgage product.

 

• Total monthly debts

Regardless of what income streams you utilize, lenders today requires that your combined monthly debts, including your estimated new mortgage payments, to be no more than 43% of your gross monthly income. If you are able to meet this threshold, then you can easily qualify for a mortgage loan regardless of whether you are relying on your normal employment income, disability awards, alimony payments, a mixture of rental income, and so forth.

With this in mind, let’s look at some common non-conventional income sources that might actually help you to qualify for a mortgage.

 

Part-time job income

To use this form of income, you must first prove that you have been receiving payments on a regular basis and that you will continue receiving it long after you have been approved for your mortgage. Most of the lenders will need proof that you have been receiving this part-time income for at least two years. In other words, you will require claiming this part-time income on your taxes to proof its authenticity.

 

Rental income

If you have been renting out an apartment, then simply use the monthly rent as a form of income when applying for a mortgage. However, you must be able to show proof of this income, meaning that it must be listed on your yearly income tax returns. This way, the lender can be able to scrutinize your returns and determine whether or not your rental income has been stable for the last two years or so. If not, they your lender might not accept your rental income as qualifying income.

 

Pensions and social security

While you might not think of applying for a mortgage loan after your retirement, some people still do. When they do, they make use of their pension and social security payments as part of their regular monthly income. As long as your pension and social security payments as well as other monthly incomes give you adequate money each month to fall under the 43% threshold, then you have a good chance to qualify for a mortgage loan.