Generally, only income reported on your tax return can be considered when applying for a mortgage, unless the income is legally tax-free and is not required to be reported.
Some lenders may offer a stated income program, which means you can be qualified for a loan based on the income you state rather than that which can be verified. Usually these programs require larger down payments and offer substantially higher interest rates than regular mortgage rates. We do not offer stated income programs at this time.
If you own rental properties, we will generally ask for the most recent year's federal tax return to verify your rental income. We will review the Schedule E of the tax return to verify your rental income, after all expenses except depreciation. Since depreciation is only a paper loss, it will not be counted against your rental income.
If you have not owned the rental property for a complete tax year, we will ask for a copy of any executed leases and estimate the expenses of ownership.
Generally, two years personal tax returns are required to verify the amount of your dividend and/or interest income so an average of the amounts you receive can be calculated. In addition, we will need to verify your ownership of the assets which generate the income using copies of statements from your financial institution, brokerage statements, stock certificates or Promissory Notes.
Typically, income from dividends and/or interest must be expected to continue for at least three years to be considered for repayment.
Information about child support, alimony, or separate maintenance income does not need to be provided unless you wish to have it considered for repaying this mortgage loan.
Typically, income from a second job will be considered if a one-year history of secondary employment can be verified.
Having changed employers frequently is typically not a hindrance to obtaining a new mortgage loan. This is particularly true if you made employment changes without having periods of time in between without employment. We will also look at your income advancements as you have changed employment.
If you are paid on a commission basis, a recent job change may be an issue since we will have a difficult time predicting your earnings without a history with your new employer.
If you were in school before your current job, enter the name of the school you attended and the length of time you were in school in the "length of employment" fields. You can enter a position of "student" and income of "0."
If you are purchasing a home, we will use the lower of the appraised value or the sales price to determine your down payment requirement.
It is still a great benefit for your financial situation if you are able to purchase a home for less than the appraised value; however our investors do not allow us to use this "instant equity" when making our loan decision.
Gifts are an acceptable source of down payment, if the gift giver is related to you or your co-borrower. We will ask you for the name, address, and phone number of the gift giver, as well as the donor's relationship to you.
If your loan request is for more than 80% of the purchase price, we will need to verify you have at least 5% of the property's value in your own assets.
Prior to closing, we will verify the gift funds have been transferred to you by obtaining a copy of your bank receipt or deposit slip to verify you have deposited the gift funds into your account.
If you are selling your current home to purchase your new home, we will ask you to provide a copy of the settlement or closing statement you will receive at the closing to verify your current mortgage has been paid in full and that you will have sufficient funds for our closing. Often the closing of your current home is scheduled for the same day as the closing of your new home. If that's the case, we will ask you to bring your settlement statement with you to your new mortgage closing.