Mortgage Qualifying with Retirement Income

 In Qualifying for a Mortgage

Are you receiving Social Security income or other retirement income? Did you know that when you apply for a mortgage, we can count more than the amount you actually receive if some of your retirement income is non-taxable? That could mean the difference between qualifying for a mortgage and not qualifying.
Here’s what you need to know.

If some of your retirement income is non-taxable, as is often the case if you receive Social Security or other retirement income, we are allowed to gross up your income when calculating your debt-to-income ratio (DTI).
For conventional (non-government) loans, we can increase the non-taxable portion of your income by 25%.
For FHA loans, we can increase the non-taxable portion of your income by the lesser of 15% or your actual tax rate.
As an example, if you receive $1,800 per month from Social Security, and it’s all non-taxable, we can increase that by $450 for conventional loans and by up to $270 for FHA loans.

Also, we can count your total Social Security income, including the amount subtracted for Medicare insurance.
Never assume you cannot qualify for a mortgage until you have spoken to us. We know the rules and do everything we can to make sure you qualify to buy a home or refinance your current mortgage.
Contact us today to see how easy it is to get a great mortgage.

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