Income is probably the most important factor to qualify for a mortgage loan. You can have prior bad credit, prior bankruptcy, prior foreclosure, and low credit scores and if you have documented income, you will qualify for a mortgage loan. If you have perfect credit, high credit scores, and good assets but you do not have documented income, you will not qualify for a mortgage loan. Your mortgage lender will only approve you and let you close on your mortgage loan only if you have a full time job or stable income and that job and/or income will continue so you are able to pay for your mortgage payment. This requirement is not just a mortgage lender’s guidelines but also federal mortgage lending guidelines.
Income Qualification In Mortgage Process
Before a mortgage lender issues you a pre-approval, the loan originator will require you to submit your two years tax returns, two years W-2s, and 30 days of paycheck stubs to make sure that you qualify. Your mortgage lender will also do a verification of employment where they will send a questionnaire to your employer to complete as of how long you have worked there, how much income you make, and how much your overtime income and/or bonus income you make and have made the past two years. Besides verifying your income and employment status, your mortgage lender needs to feel comfortable with the likelihood of your continued employment so they feel comfortable that you are able to make your mortgage payment.