Income qualifying guidelines for mortgage financing

Income qualifying guidelines for mortgage financing

Income qualifying guidelines for mortgage financing

“Not all incomes are equal” certainly applies in the mortgage world. There are substantially different ways of determining your qualifying income when applying for a mortgage. Here, Mark Wells of Preferred Financial Services covers the various scenarios that apply to income guidelines for borrowers who are not self-employed.

I bring home $750 a week from my job.  Is that my qualifying income?  If you receive an hourly wage or a salary, your “take home pay” is not your qualifying income.  Lenders use your GROSS pay (the higher amount on your paycheck,  before taxes are taken out) as your qualifying income.  They convert your gross pay to a monthly amount, even if you are paid weekly or bi-weekly.

Is this true even if I just started my job?  If your job is a full-time job, there is no waiting period required to count your gross income as your qualifying income.

I earn overtime (or a bonus) on my regular job. Can I count that in my qualifying income?   The rule on counting overtime, bonus, or any other non-regular income is called the “two year rule.”  You can count it if you have been on your job for at least two years, and you must average the income for that two year period.

I get an automobile allowance from my employer.  Does that count as income?  If it has been received for the past two years it can be averaged and counted as additional income.

I have a regular job, but work a second part time job, too.  Do I get to add my part time income?  That “two year rule” just keeps popping up. If you have been on the same part time job for two years, you can average the two-year income and add it to your regular job income to qualify.

I drive a truck for my company, and get paid by the mile.  So how is my income determined?  Would you believe it?  The two year rule applies. If your income is determined by the mile, or by the visit (for home healthcare nurses), or by the piece (for production of goods),  then you must have been on that job for two years, and your income is averaged for those two years. PLEASE NOTE:  If you take any non-reimbursed business expense deductions on your Schedule A, your income will be decreased by the amount reported there.  Many of the above workers do this, and it can affect your qualifying.

I welcome any comments or questions and can be reached at (864) 235-9596 or via email at

Or Text Me Now! 864-430-4856.

Next week: Pastors, temporary employment and staffing agencies, and partial ownership.