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I am wondering as I was told that on a USDA loan another person's income can be factored in without their name actually being on the loan. Is this information factual or is this not accurate?
What are the details of this if this is true?
You really need to speak to a lender that offers USDA loans for the specifics, but there are 2 different USDA mortgage products and both are income driven:
The Direct Loan - allows a household to make up to 80% of the area median income.
The Guaranteed Loans - allows a household to make up to 115% of the median income to qualify.
To see if a household is eligible the gross income of ALL household wage earners is verified.
If the household qualifies for a USDA loan then the repayment income, of parties to the note, is verified and documented by the underwriter as to it's dependability. Income such as overtime, bonus, commissions, and self employment must be consistent and having a history of at least two years.
The repayment income is the amount used to determine the amount that can be borrowed not the Household income.
So - I think to answer your question - another person residing your household income will be considered for qualification only.. Their income will not be considered for repayment and amount to borrow unless they are on the note.
UDSA Direct loans consider the income of all household members who will reside in the home even though they are not on the loan. Hope that helps