Sources of Qualifying Income for a Home Loan

When a lender evaluates your mortgage application, it will look to see how much money you make in a year. In some cases, it will average your income over the past two years. However, your total income can be more than what you earn working for your employer. Other sources of income can include alimony payments received or revenue from a rental property.

What Are Some Other Common Sources of Income?

If you receive disability or other government benefits, that income may help you qualify for a home loan. The same is true if you receive money from a settlement, an annuity or a pension. However, whether this income will be used to determine your DTI depends on rules that are set by the lender itself. In some cases, it may choose to average your income or only count a certain percentage of it when making a loan decision.

Self-Employment Income Is Usually Averaged

If you are a sole proprietor or otherwise work as an independent contractor, your income may be averaged over the previous 24 months. This helps to smooth out any peaks or valleys in your earning potential. For instance, if you made $50,000 one year and $150,000 the next, you would qualify for a loan based on a self-employment income of $100,000. That number could go up if you have wages, capital gains or other outside sources of income to report.

There Are Loans to Fit Most Borrowers With a Mix of Income Sources

If you are looking for as many loan options as possible, mortgage brokers in Las Vegas may be able to help. Brokers can generally look up a variety of loan products offered by multiple companies. Therefore, it can increase your odds of finding something that fits your financial situation.