Income Used For Mortgage

What others say the traditional model.

Income used for mortgage. Proof of income can come easily through an employment letter current pay stubs t4 slips t5 slips and any other official document that is used to declare your income to cra. Let s look at 4 different non traditional income qualifying situations. If you are thinking of applying for a mortgage soon you need to know what types of income you can use to qualify. In an article on how the mortgage crash of the late 2000s changed the rules for first time home buyers the new york times reported.

Good credit insured purchase under 1 million with 10 down. 35 45 of pretax income. Total monthly mortgage payments are typically made up of four components. Lenders have strict requirements for income.

There s no grey area here. Just because you make money doesn t mean you can use it for qualifying purposes. Types of investment income that can be used for mortgage qualification. That s the general rule though they may go to 41 percent or higher for a borrower with good or excellent credit.

What types of income can be used to qualify for a mortgage. Principal interest taxes and. As a rule of thumb mortgage lenders don t want to see you spending more than 36 percent of your monthly pre tax income on debt payments or other obligations including the mortgage you are seeking. The general rule is that you can afford a mortgage that is 2x to 2 5x your gross income.

If you re determined to be truly conservative don t spend more than about 35 of your pretax income on mortgage property tax and home insurance payments. Whether paid by the hour or on a salary this t4 item is directly counted towards your mortgage. December 17 2018 by jmchood.