When you think of income, what is the first thing that comes to your mind? If you said employment, you’re not alone. In most cases, a person’s job is their most significant source of income, but it might not be the only one.

Income is one of the most crucial qualifying factors when you’re shopping for a mortgage. It’s important to consider all income sources at the mortgage desk to increase your odds of scoring a mortgage with favorable terms.

When you’re discussing your income sources with one of our loan professionals, you’ll find that certain income types require a 24-month average. Using a 24-month average in our calculations ensures that you aren’t taking on a larger mortgage than you can handle.

What Forms of Income Require a 24-Month Average?

When we’re adding up your income sources, here are the ones that we require to have a 24-month average:

  • Dividend and interest payments
  • Capital gains
  • Trust income
  • Foster care income
  • Stock options

24-Month Average Explained

If math isn’t your strong suit, here’s an example of how we apply the calculation:

Let’s say that you receive dividend payments of varying amounts four times per year. Our loan professionals will add up all of your dividends earned within the past 24 months and divide them by 24 to find the average dividend amount earned per month. The same calculation applies to all income types listed above.

Contact Us Today!

At MortgageDepot, we understand that identifying your income sources and using them to qualify for a home loan is tricky. We’re here to guide you through the process. Contact us today to learn how to make your income work to your advantage at the mortgage desk.

Connect with one of our loan consultants to learn more.

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