HELP!!!! Application and Income

torebuild2014 · ‎07-19-2017

I am getting ready to help my husband apply for a credit card, but I feel like our income and debt structure is a bit complicated when it comes to filling out indiviual credit card applications when there is only one option for reporting income. His W-2 income is approximately $100k. There is also rental income with corresponding mortgages under his name. That is the easy part as we have leases and deposit history to offset that debt payment.

The complication comes with our main mortgage of $3,500/mo (and only joint account) and the amount which would require my income to support the payment. I am not sure how to have him approach the income portion of the application. Most of the applications that I have seen do not have a way to distinguish the different incomes and I feel confident this will definitely be impacted by the joint mortgage that shows on his credit report even though it shows as a joint account.

Your thoughts and guidance to achieve best results with is greatly appreciated.

Anonymous · ‎07-19-2017

I always put our joint income when filling out apps unless it states otherwise. If it gives me the option of "Other Income," I will put mine on primary and spouse on other income (NFCU does this). I don't know if this helps, but this is what I do.

torebuild2014 · ‎07-19-2017

@Anonymous wrote:
I always put our joint income when filling out apps unless it states otherwise. If it gives me the option of "Other Income," I will put mine on primary and spouse on other income (NFCU does this). I don't know if this helps, but this is what I do.

Thank you Bella007 . So in the example below, would you include "ALL" of the mortgages including the rental property mortgages and the main mortgages as well as rental income and my income?

TOTAL ANNUAL INCOME

$

Alimony, child support or separate maintenance income need not be revealed if you do not choose to have it considered as a basis for repaying this loan.

MONTHLY RENT/MORTGAGE

$

K-in-Boston · ‎07-19-2017

If you and/or your spouse claim the rental payments as income on your taxes, by all means that should be included as part of your income. Otherwise, I would think the debt-to-income ratio would be artificially high if you were paying multiple mortgages but only claiming W2 income. I'm a little confused by your wording since you mention "rental property mortgages," "main mortgages" and "rental income" as income sources, though. If you're asking if those other mortgages should be included in the Monthly Rent/Mortgage column, that's a new one for me. It may only be asking for your primary residence, but I'm not sure how investment properties would be entered there if at all.

torebuild2014 · ‎07-19-2017

@K-in-Boston wrote:
If you and/or your spouse claim the rental payments as income on your taxes, by all means that should be included as part of your income. Otherwise, I would think the debt-to-income ratio would be artificially high if you were paying multiple mortgages but only claiming W2 income. I'm a little confused by your wording since you mention "rental property mortgages," "main mortgages" and "rental income" as income sources, though. If you're asking if those other mortgages should be included in the Monthly Rent/Mortgage column, that's a new one for me. It may only be asking for your primary residence, but I'm not sure how investment properties would be entered there if at all.

Hi K-in-Boston thanks for your reply and sorry for the confusion.

The example that I used in the original post is asking for Monthly Rent/Mortgage and is from an actual application.

His credit report will reflect 4 (four) mortgages. Three of the mortgages are listed as individual accounts and are in his name only and one joint account mortgage (for our main dwelling). The three individual mortgages are actually rental properties with rental income and yes they get reported on tax returns but are basically a wash. The joint mortgage is for our main dwelling and would negatively impact his debt-to-income even with his W-2 income due to the amount of the payment. .So I am surmising that he probably needs to include all of my W-2 income as well just because of the main dwelling mortgage payment amount.

So the question is two-fold: (1)Should all of the mortgages get listed under the Monthly Rent/Mortgage since they do appear on his CR along with all of his income, which is W-2, rental income along with my income? I know I may be overcomplicating this, but I think he has only been listing his W-2 income on applications and if granted credit it is very low.

torebuild2014 · ‎07-19-2017

@K-in-Boston wrote:
If you and/or your spouse claim the rental payments as income on your taxes, by all means that should be included as part of your income. Otherwise, I would think the debt-to-income ratio would be artificially high if you were paying multiple mortgages but only claiming W2 income. I'm a little confused by your wording since you mention "rental property mortgages," "main mortgages" and "rental income" as income sources, though. If you're asking if those other mortgages should be included in the Monthly Rent/Mortgage column, that's a new one for me. It may only be asking for your primary residence, but I'm not sure how investment properties would be entered there if at all.

Hi K-in-Boston and thanks for your reply and sorry for the confusion. So... yes, part of my question is since the three mortgages are for rental properties and listed on his credit report report as individual mortgage accounts, along with the main dwelling joint mortgage payment, should they be included in the Monthly Rent/Mortgage portion of the application?

Our main dwelling mortgage amount is such that he would not qualify for anything on his income alone and would probably need to include my income. The three mortgages for the rental properties have rental income that and do get reported on tax returns, but they are basically a wash.

My initial thoughts on handling this are at a minimum to list all of the following: His W-2 income, all rental income, and my W-2 income. For the Monthly Rent/Mortgage, only list the Main dwelling mortgage and not any of the other mortgages listed on the credit report. In my mind, doing it this way there would be sufficient income to compensate for all of the mortgage payments that are show on the CR report.

However, I would like to hear other opinions on what may be the best way to approach.

iced · ‎07-19-2017

@torebuild2014 wrote:
@K-in-Boston wrote:
If you and/or your spouse claim the rental payments as income on your taxes, by all means that should be included as part of your income. Otherwise, I would think the debt-to-income ratio would be artificially high if you were paying multiple mortgages but only claiming W2 income. I'm a little confused by your wording since you mention "rental property mortgages," "main mortgages" and "rental income" as income sources, though. If you're asking if those other mortgages should be included in the Monthly Rent/Mortgage column, that's a new one for me. It may only be asking for your primary residence, but I'm not sure how investment properties would be entered there if at all.
Hi K-in-Boston and thanks for your reply and sorry for the confusion. So... yes, part of my question is since the three mortgages are for rental properties and listed on his credit report report as individual mortgage accounts, along with the main dwelling joint mortgage payment, should they be included in the Monthly Rent/Mortgage portion of the application?

Our main dwelling mortgage amount is such that he would not qualify for anything on his income alone and would probably need to include my income. The three mortgages for the rental properties have rental income that and do get reported on tax returns, but they are basically a wash.

My initial thoughts on handling this are at a minimum to list all of the following: His W-2 income, all rental income, and my W-2 income. For the Monthly Rent/Mortgage, only list the Main dwelling mortgage and not any of the other mortgages listed on the credit report. In my mind, doing it this way there would be sufficient income to compensate for all of the mortgage payments that are show on the CR report.

However, I would like to hear other opinions on what may be the best way to approach.

My opinion on this is you have three ways you can approach this:

1. If it's a joint application, count everything. Simple enough.

2. If it's an individual application and your incomes are all individual (including rental income), only count the income in his name.

3. If you have some joint income/debt (as it sounds like you do), you can soft-break the income/debt up among you for the purposes of individual applications. That is, if you pay 2000 of the mortgage and he pays 1500, he should include 1500. If you split the rent income 50/50, he should only claim 50% of it. If you are consistent with it, it's easy enough to justify and prove, even under income verificaation. Do not try to double dip here, as that's a sure-fire way to get into trouble if you are ever asked for income verification. If he claims 75% of the rental income and 25% of the mortgage payment, you can't be claiming 50% of the income and 50% of the mortgage on your individual applications.

Anonymous · ‎07-19-2017

I think the impact of income on a credit card app isn't nearly as important as some make it out to be. Just put down the total of any income that can be verified. Since a credit card is revolving debt, DTI is irrelevant. Look up some of the treads comparing income to available credit...you'll see what I mean.

torebuild2014 · ‎07-19-2017

@iced wrote:
@torebuild2014 wrote:
@K-in-Boston wrote:
If you and/or your spouse claim the rental payments as income on your taxes, by all means that should be included as part of your income. Otherwise, I would think the debt-to-income ratio would be artificially high if you were paying multiple mortgages but only claiming W2 income. I'm a little confused by your wording since you mention "rental property mortgages," "main mortgages" and "rental income" as income sources, though. If you're asking if those other mortgages should be included in the Monthly Rent/Mortgage column, that's a new one for me. It may only be asking for your primary residence, but I'm not sure how investment properties would be entered there if at all.
Hi K-in-Boston and thanks for your reply and sorry for the confusion. So... yes, part of my question is since the three mortgages are for rental properties and listed on his credit report report as individual mortgage accounts, along with the main dwelling joint mortgage payment, should they be included in the Monthly Rent/Mortgage portion of the application?

Our main dwelling mortgage amount is such that he would not qualify for anything on his income alone and would probably need to include my income. The three mortgages for the rental properties have rental income that and do get reported on tax returns, but they are basically a wash.

My initial thoughts on handling this are at a minimum to list all of the following: His W-2 income, all rental income, and my W-2 income. For the Monthly Rent/Mortgage, only list the Main dwelling mortgage and not any of the other mortgages listed on the credit report. In my mind, doing it this way there would be sufficient income to compensate for all of the mortgage payments that are show on the CR report.

However, I would like to hear other opinions on what may be the best way to approach.
My opinion on this is you have three ways you can approach this:

1. If it's a joint application, count everything. Simple enough.

2. If it's an individual application and your incomes are all individual (including rental income), only count the income in his name.

3. If you have some joint income/debt (as it sounds like you do), you can soft-break the income/debt up among you for the purposes of individual applications. That is, if you pay 2000 of the mortgage and he pays 1500, he should include 1500. If you split the rent income 50/50, he should only claim 50% of it. If you are consistent with it, it's easy enough to justify and prove, even under income verificaation. Do not try to double dip here, as that's a sure-fire way to get into trouble if you are ever asked for income verification. If he claims 75% of the rental income and 25% of the mortgage payment, you can't be claiming 50% of the income and 50% of the mortgage on your individual applications.

Hi iced. Thank you for replying.

Okay... I understand #1 and #2.

#3 He pays none of the primary mortgage and it is drafted from my individual checking account although it is a joint liability on both of our credit reports, but that it is very easy to document that he does not make this payment. However, I just feel that a $3.5k mortgage showing up on his report and reporting no monthly mortgage or rent is a flag when the monthly debt is on the report and an application won't even make to an algorithum for income-to ratio.

All of the rental income and expenses are paid from a joint account held specifically for the rental properties but the mortgage payments are only in his name and also paid from that account, so I agree that all of the income for those get allocated to him that are on his report. Nor do I ever claim them on any of my applications, only the ones on my credit report. I did not mean to imply that I would double dip, exactly the opposite. I only want to find a way to offset the joint mortgage on his credit report that is paid from my income.

iced · ‎07-19-2017

@torebuild2014 wrote:
Hi iced. Thank you for replying.

Okay... I understand #1 and #2.

#3 He pays none of the primary mortgage and it is drafted from my individual checking account although it is a joint liability on both of our credit reports, but that it is very easy to document that he does not make this payment. However, I just feel that a $3.5k mortgage showing up on his report and reporting no monthly mortgage or rent is a flag when the monthly debt is on the report and an application won't even make to an algorithum for income-to ratio.

All of the rental income and expenses are paid from a joint account held specifically for the rental properties but the mortgage payments are only in his name and also paid from that account, so I agree that all of the income for those get allocated to him that are on his report. Nor do I ever claim them on any of my applications, only the ones on my credit report. I did not mean to imply that I would double dip, exactly the opposite. I only want to find a way to offset the joint mortgage on his credit report that is paid from my income.

If you can show he pays none of the monthly mortgage or rent, it's fine. If a creditor flags it, you can explain it and it should pass muster. Don't worry, your situation is not unique. Our condo is in my wife's name only but I make the mortgage payment. As such, I will report making a mortgage/rent payment while showing no real estate in my name. It has yet to be a problem for us.