32 Types of Income

 In First-Time Home Buyers, Qualifying for a Mortgage

Calculating a borrower’s income is one of the more confusing aspects of a lender’s job, mainly because there are so many different types of income.  Fannie Mae, which sets the underwriting guidelines for conventional loans, lists 32 different types of income. The confusing part is that all these types of income are calculated differently.  

If you complete a mortgage loan application by yourself, it’s very important to understand that the lender may not be able to count all the income you entered in the application.  If the lender doesn’t contact you and ask follow-up questions regarding your income, that’s a bad sign.

If you complete the loan application with the lender (on the phone or in person) and they don’t ask follow-up questions regarding your income, that’s also a bad sign.

Lenders cannot tell you with any certainty how much you qualify for without knowing the types of income you earn, and without knowing how to calculate the allowable income for each type.  If no one ever asks you, and you calculated your income incorrectly, you may believe you qualify for a certain amount, only to have the loan be denied when the underwriter calculates your income correctly.  When a loan is denied, it can cost you a lot of time and money, not to mention the heartbreak of being told you cannot purchase the house you wanted.

Here are the various types of income.  Make sure your lender asks you about them!  If you have questions about your income, give us a call.  We are happy to answer any questions you might have.

 

  • Base Pay – Salary or Hourly
  • Bonuses
  • Overtime
  • Commission Income
  • Part-Time Income
  • Second-Job Income
  • Multiple-Job Income
  • Seasonal Income
  • Military Income
  • Rental Income
  • Alimony or Child Support
  • Automobile Allowance
  • Boarder Income
  • Capital Gains Income
  • Disability Income
  • Employment-Related Assets as Qualifying Income
  • Foreign Income Earned by U.S. Citizens
  • Foster-Care Income
  • Interest and Dividends Income
  • Mortgage Credit Certificates (MCC)
  • Mortgage Differential Payments Income
  • Non-Occupying Co-Borrower Income
  • Notes Receivable Income
  • Public Assistance Income
  • Retirement, Government Annuity, and Pension Income
  • Royalty Payment Income
  • Social Security Income
  • Tip Income
  • Trust Income
  • Unemployment Benefits Income
  • VA Benefits Income
  • Self-Employment Income
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