Types of income

[axxy]

If your income seems unorthodox, does it ruin your chances of getting a mortgage?

For example, if you sold your previous house with owner financing, and are getting mortgage payments from the new owner of that house, what will a mortgage lender say about those mortgage payments?  That they aren't income?  So, for purposes of qualifying for a new mortgage, you don't gain anything at all by having a previous house sold with owner financing?  Is it the same as not having ever had that house in the first place, or is it even worse?

What about investment income?  If you get dividends, what does it take to qualify them as regular income?

What if you're retired, and get various types of retirement income?  Are those counted?  Such as social security, annuity, retirement account, etc.?

[StartingOver10]

Income is counted. Various investment income is counted. Rental income is counted. Mortgage income is counted. All types of income are counted.

There are two main things when applying for a mortgage when you have non-standard W-2 type income:

1) the loan officer is critical in this instance - make sure the actual loan officer is familiar with taking an application for self employed borrowers

2) the income must show on your tax returns - and not all be written off in expenses.

Have you tried TrustCo? They have portfolio loans and work well with borrowers on a primary residence with the type of income you are describing. However, their area in which they lend is small (North East US and S. Florida).

There are other portfolio lenders or regional lenders that work these types of deals. Or go to a mortgage banker - they underwrite and fund their own loans. Stay away from the big box banks for the most part.

[axxy]

Self employment, schedule C, etc., are one area I can understand being complicated and raising suspicions among mortgage underwriters.  But what about non-taxable and partly taxable personal income, that's not on schedule C?  Does that kind of income ever cause any problems?  As just one of many examples, social security is not always taxable, and sometimes partly taxable.

When an applicant gives income figures, are those figures supposed to be categorized into types of income, by the applicant?  Or does someone else break them down while investigating them?

[StartingOver10]

That is why you need a great LO. You and the LO will discuss your income in detail and the LO will put it in the proper catagories. For example, some of the SS income is grossed up because it isn't taxable. If you get a LO that doesn't know these nuances, your application won't reflect your actual payment ability.