Income for Mortgage Question

**disneysteve** · 05-05-2013, 03:27 AM

So you have $2,400/year in legal income and want to buy a house for $135,000? Lots of luck. No, I don't think any lender will count your illegal income toward qualifying you. My advice is to start reporting your income, pay your taxes, and save up a nice down payment so that next year you can qualify.

**0scarC** · 05-05-2013, 07:35 AM

Originally posted by disneysteve View Post

My advice is to start reporting your income, pay your taxes, and save up a nice down payment so that next year you can qualify.

The saving part isn't an issue the issue is the income that can't be reported because it isn't mine. Otherwise I'd report without an issue.

**disneysteve** · 05-05-2013, 01:22 PM

Originally posted by 0scarC View Post

The saving part isn't an issue the issue is the income that can't be reported because it isn't mine. Otherwise I'd report without an issue.

I misunderstood. I thought you meant you had undocumented income. If only your name will be in the loan the other's incomes don't matter even if they are reported. So you'd have to get them to start reporting their incomes and then include them on the loan.

**Petunia 100** · 05-06-2013, 09:01 AM

Originally posted by 0scarC View Post

I am considering getting a house, to move in with my parents and sister. Looking at the family finances we see that we are in excellent shape . No debts, or any other black marks on my end and I am the only applicant. (I am the only one with unblemished credit

.)

The main issue however, is that the family income is mostly undocumented because it's under the table. Not only that, my stated income is lower than the minimum needed to be approved for the loan, because it is higher than an ideal 30%.

I have no way of proving any other income since it's cash only. If I were to apply for a loan, with income only related from my main job, I know I couldn't qualify. is there any way that a lender would be able to look past that.

The loan in question is an FHA and I am overestimating my interest rate at 7% for simplicity, have not applied yet due to said issues. If accepted I can knock it out in about 12 years.

Loan amount 135,000
Monthly Payment: 810
Monthly Income available for payments(My end only) : 600 Month Minimum wage

Monthly Income available for payments(Sister's end): 800 Month Babysitting income
Monthly Income available for payments(Father's end): 650 Month Freelance Mechanic

Any assistance would be highly appreciated.

How would you pay off a 135k mortgage in 12 years? All 3 incomes together add to $2,050 per month. Even if your father and sister are willing to hand over 100% of their illegal income to you, it does not seem possible. The three of you must eat, pay utilities, etc. The monthly payment is not the entire cost of home ownership.

If you want to qualify for a mortgage, you're going to need more documented income. What sort of job prospects do you have? Concentrate on acquiring and/or improving your marketable skills and landing a better paying job.

**0scarC** · 05-07-2013, 12:59 PM

Originally posted by Petunia 100 View Post

How would you pay off a 135k mortgage in 12 years?

After all budgeted expenses and savings, anything let over would be added towards the principal. As stated, the amounts assumed at the top are what my family members have dedicated strictly for the mortgage, and nothing else. Bills, other than lightning and heating, are fixed, and not set to change due to the move and are already budgeted for currently.

Originally posted by Petunia 100 View Post

All 3 incomes together add to $2,050 per month. Even if your father and sister are willing to hand over 100% of their income to you, it does not seem possible. The three of you must eat, pay utilities, etc. The monthly payment is not the entire cost of home ownership.

This is only the 30% of current income, ideal for mortgage payments. We make more than that but the amounts listed are the baseline for the income needed for mortgage, they also pay more than that on our current apartment so this method still works better in their favor. My max budget for a house is $150,000 and assuming a 6% with PMI (worst case scenario) Mortgage payments are $900 per month + PMI. Still less than our current apartment, by at least $200. Money which would be dedicated to home repairs.

Originally posted by Petunia 100 View Post

If you want to qualify for a mortgage, you're going to need more documented income. What sort of job prospects do you have? Concentrate on acquiring and/or improving your marketable skills and landing a better paying job.

Currently working on that at the moment, attempting to get a different job, near the prospective area before I start the application process in November (waiting for my most recent credit inquiry to drop its effect.)

**Petunia 100** · 05-07-2013, 03:49 PM

Originally posted by 0scarC View Post

After all budgeted expenses and savings, anything let over would be added towards the principal. As stated, the amounts assumed at the top are what my family members have dedicated strictly for the mortgage, and nothing else. Bills, other than lightning and heating, are fixed, and not set to change due to the move and are already budgeted for currently.

This is only the 30% of current income, ideal for mortgage payments. We make more than that but the amounts listed are the baseline for the income needed for mortgage, they also pay more than that on our current apartment so this method still works better in their favor. My max budget for a house is $150,000 and assuming a 6% with PMI (worst case scenario) Mortgage payments are $900 per month + PMI. Still less than our current apartment, by at least $200. Money which would be dedicated to home repairs.

I see. Got it.

Originally posted by 0scarC View Post

Currently working on that at the moment, attempting to get a different job, near the prospective area before I start the application process in November (waiting for my most recent credit inquiry to drop its effect.)

Good luck with the job. Be aware that lenders do not like to see recent job changes. They may not be willing to lend until you have been at your new job awhile. However, don't let that stop you from pursuing a better job. You will have a much easier time getting ahead if you have more to work with.

Best of luck to you with your goals.

**0scarC** · 05-07-2013, 09:31 PM

Originally posted by disneysteve View Post

I misunderstood. I thought you meant you had undocumented income. If only your name will be in the loan the other's incomes don't matter even if they are reported. So you'd have to get them to start reporting their incomes and then include them on the loan.

I was also considering listing the other income as "Rental Income" so lenders know that I have a income stream available for the payments needed, since our apartment rent is more than out estimated mortgage payment. Any thoughts?

**0scarC** · 05-07-2013, 09:34 PM

Originally posted by Petunia 100 View Post

Good luck with the job. Be aware that lenders do not like to see recent job changes. They may not be willing to lend until you have been at your new job awhile.

I was considering keeping my current job at part time until the mortgage application process is over for employment history, after that I'd proceed with my proposed job.

Oops. Sorry didn't mean to double post .

**leaderscorp** · 05-07-2013, 09:54 PM

There are certain documents required by the lender included in your mortgage application. If you won't be able to present legal or the right documents, especially your income statement, you will not be qualified for sure.

**0scarC** · 05-08-2013, 01:28 AM

Originally posted by leaderscorp View Post

There are certain documents required by the lender included in your mortgage application. If you won't be able to present legal or the right documents, especially your income statement, you will not be qualified for sure.

I need to know well in advance what those would be if possible. Any help for this big change for my family would be great.

**disneysteve** · 05-08-2013, 04:09 AM

Originally posted by 0scarC View Post

I was also considering listing the other income as "Rental Income"

That would only work if it is actually rental income. Do you own the property where you currently live? If so, then you might be able to justify this, but I suspect you do not. It isn't rental income to you if you aren't the owner/landlord. It is rental income to the actual owner/landlord.

I appreciate your creativity but you can't lie or cheat your way into a mortgage.

**0scarC** · 05-08-2013, 07:24 AM

Originally posted by disneysteve View Post

That would only work if it is actually rental income. Do you own the property where you currently live? If so, then you might be able to justify this, but I suspect you do not. It isn't rental income to you if you aren't the owner/landlord. It is rental income to the actual owner/landlord.

I appreciate your creativity but you can't lie or cheat your way into a mortgage.

Wasn't entirely sure as to how I'd be able to report the other income. Is it possible if I show my future mortgage provider info, our payment history, to show that we can in fact handle the mortgage. Any ideas would be great.

**disneysteve** · 05-08-2013, 07:29 AM

Originally posted by 0scarC View Post

Is it possible if I show my future mortgage provider info, our payment history, to show that we can in fact handle the mortgage. Any ideas would be great.

Whose name would go on the mortgage? If it is only your name then only your income is relevant. If the others would be included on the loan, then their income would count too. But you still have the problem that most of the income is illegal so it wouldn't count anyway.

You have all chosen to live outside of the legal system. Now you are facing one of the consequences of that illegal activity.

**parafly** · 05-08-2013, 10:16 AM

Keep in mind that your lender will most likely require that you submit tax returns from the past couple of years as well as bank account statements from the past few months. Prior to approval, these documents will be reviewed to confirm the information you submitted on your mortgage application.

Rental income is not going to work because it will not be confirmed by your tax returns.

My advice is to not include any type of illegal income on your mortgage application.

Income for Mortgage Question