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What Forms of Income Can I Use to Get a Mortgage?

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Many people are in the market to refinance or buy a home but aren’t sure what forms of income can be used to get a mortgage. Most people know that traditional employment income– the kind that gets reported on a Form W-2– can be used to obtain a mortgage, but many don’t know that other types of income are eligible too. As a good rule of thumb, if the income is ongoing and taxable, it can usually be used for consideration on your mortgage application. Of course, there are exceptions, as things like child support and Social Security income can also be used. 

Wages and Salary Income (Including Commissions, Overtime and Bonuses)

Whether you are an hourly or salaried employee, the funds you make at work are forms of income that can be used to get a mortgage. This includes all wages reported on your W-2, including commissions, overtime, and bonuses, so long as you can prove that you’ve gotten it consistently with your tax returns spanning the two years prior to your mortgage application. You may also need to obtain a statement from your employer that your commissions, overtime, or bonuses are likely to continue for the duration of your employment. Part time income is included as well, so long as it is ongoing for two years or more.

Seasonal Income

From snow plowing to lawn mowing, there are many jobs that require work only during specific seasons. If you work seasonally every year, this income can be used to get a mortgage.

Unemployment Income (only in specific instances)

If you are a seasonal worker and take planned unemployment benefits during your off season and can prove the consistency of the seasonal employment, unemployment benefits may be considered in some cases. 

Self Employment Income

Ongoing self employment income that can be proven for a longer duration of time can be considered on your mortgage application, but additional verification may be needed for this type of income.

Contracting or Business Income (1099 income)

1099 business income is allowable with additional verifications, such as a Profit and Loss statement that proves business profitability. 

Military Income

You base rank pay, plus additional pay if you include proof that it will continue, is included as acceptable income. Military allowances can also be considered. 

Interest and Dividends from Investments

Most types of investment income are not considered eligible for a mortgage application determination, but interest and dividends earned may be considered (although sometimes they will not be considered at 100% of their value). Scenarios may vary on an individual basis. 

Alimony and Child Support

Alimony and child support are able to be used to get a mortgage, so long as you can prove that you have received the payments for the required time and that you will continue to receive payments for the required time. You will also need to provide copies of your divorce decree or child support order. 

Rental Income

If you own rental properties, the income you receive from your rental units can be included as income that is eligible to determine the outcome of your mortgage application. In some cases, you may only receive partial credit for this type of income. However, border income– the income you receive from renting out a room in your home– is usually not considered as allowable income. 

Social Security and Social Security Disability 

Whether you receive Social Security payments due to retirement or disability, the funds are considered allowable income when you get a mortgage

Pensions

If you have a pension, the income can be used to obtain a mortgage. 

Other Forms of Income

There may be other forms of eligible income based on your unique situation. If you have an ongoing form of income and aren’t sure whether or not it can be used to get a mortgage, call one of our Personal Mortgage Advisors toll-free today at 877-480-8050