Types of Income You Can Include to Increase Homebuying Power

Many times due to the lack of experience, we have clients come across our desks that were turned down by another lender. One of the biggest situations that we run into is when going to qualify for that mortgage, the other lender didn't gross up what we call non-taxable income.

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In most situations, income used to qualify for a forward mortgage or traditional mortgage is gross income - basically before taxes. And in some situations, our clients have child support, clergy, housing allowance, foster care, military allowance, disability, social security - just to name a few.

And since some of those incomes are, most of those incomes are not taxed, if a lender knows what they're doing, they can actually gross that amount up. Generally speaking, 15 to 25% depending on the scenario is what that number can be. So if someone is bringing in $1000 a month of non-taxable income, depending on the program we're looking to qualify you for, we can grow set up by 15% or $150 to as much as $250 - again, depending on the scenario.

So this will help usually push clients in this into the next price range when they are living on a fixed or non-taxable income. It's not a unique situation, we see it all the time. More and more clients are retiring.

We're seeing more and more of our veterans that served in the armed forces getting disability income and it's so important you're working with the right lender to make sure that they're looking at the guidelines and the rules and and taking advantage of every possible situation like grossing up income.

If you're receiving any type of income that's not taxed, let's make sure you're getting approved for the purchase price you deserve. If you have any questions at all, you'd like a second opinion, please don't hesitate to reach out to myself or my team. Look forward to speaking with you.