Uncoventional Income

Income sources for home loans and mortgages do not always have to come from salaried or self employment. There are various ways to earn income including:

• Part-time
• Second job
• Seasonal employment
• Alimony
• Child support
• Foster care
• Roommate rental income
• Pension
• Retirement income
• Investment property income (100%)
• Housing allowance for military or clergy

The more income that you can provide your mortgage professional, the more loan programs become available to you. Every little bit helps when you are applying for a new mortgage. Your debt to income ratio (DTI), is a major factor when trying to qualify for a mortgage. The lower the DTI, the greater chance you have of being approved.

Some lenders will allow the use of a car allowance and/or a cell phone allowance to be used as income. There will have to be a good consistent history of recieving this money and you will need proof that it will continue to have a chance at a lender allowing this.

Income from part time jobs can be used to qualify for a mortgage as long as the applicant has had the part time job for at least two years, and there is likelihood of continued employment. Some banks only allow part time job income of up to 25% of the primary income to be included in the qualification ratio.

If you have hard to prove or unconventional income it may be easier for you to secure a mortgage through a stated or no doc loan program. These programs were designed with borrowers in situations where income is hard to document.

Twelve months of bank statements can also be used to proove your income. This is a useful method of verifying unconventional income - vs - going stated, the twelve months bank statements will yield a lower interest rate.

Employment history and length of employment are crucial when using a reduced or no documentation loan.
Even if you are self employed be prepared to prove how long you have been in business. Oten times a business license, business checking account, or a letter from your accountant will satisfy this requirement.

You are not required to disclose other sources of income, and if they aren't necessary to qualify for a loan, you may opt not to. However, other income such as child support, alimony, etc., can be used to help qualify for a mortgage if needed.

» DISCLAIMER: The information contained in this article on 'Uncoventional Income' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.