Wednesday, June 8, 2011

How Do I Determine My “Mortgage Income”?

Here are some basic things you should know when trying to determine your “Mortgage Income:”

Proof of Income
Informing your lender of your annual income often isn't enough to qualify for a mortgage loan. You must provide proof of your earnings through copies of your most recent pay stubs or a letter from your employer detailing your annual earnings. You can also provide your mortgage lender with copies of your most recent W-2s and tax statements.The types of income your mortgage lender will review when evaluating your application isn't restricted to employment earnings only. You can also use federal benefits, such as Social Security payments, alimony, commissions or investments when qualifying for a new mortgage loan.

Debt Ratio
Even if your income is substantial, the amount of debt you carry could disqualify you from a mortgage. Lenders compare your income to the debt payments you must pay out each month to other lenders and creditors. Your car payment, credit card payments and other loan payments detract from the amount of disposable income you have available to make payments on a home loan. All lenders' policies differ but, in general, a mortgage lender wants to see that your combined monthly debt liability -- including your new mortgage payment -- total no more than 36 percent of your total monthly income.

Down Payment
In addition to earning enough money each month to prove you can comfortably meet your debt obligations, you also must have set aside funds to make a down payment on your purchase. The down payment reduces the amount of money the lender provides and partially pays down the total purchase price of the home. The higher your down payment, the greater equity you hold in the home. This protects the lender. In the event you default, the lender is more likely to recover its full investment if you made a considerable down payment.

Find Out Today What You Can Qualify For
With our no cost / no obligation rate quote, you can’t lose for asking the question ‘what can I qualify for’.  Our mortgage professionals can guide you to a lower rate and/or give you a road map to get yourself set up to achieve your financial goal of a purchase or a refinance.  To apply today go to the MAC5 Secure Loan Application and take 10 minutes to fill out the online application and start saving money today!


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