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What’s Classified as Income for Mortgage Qualifying Purposes?

Published on December 10, 2016 in Qualification Guidelines by Eva

What is classified as income for qualifying purposes? Some forms of income that represent revenue to your household may not count as income for qualification purposes. Here are some of the many sources of income and some of the guidelines for using them to qualify for a mortgage. The important thing when it comes to income is to demonstrate consistency and sustainability.

Employment income

If you are an employee of a company or corporation, the basic guideline for income eligibility is that you have been employed for one year with the same employer or

at least one year in the same line of work with no probationary period on the new employment.

Self-employment

If you are self-employed, you can still qualify, but most lenders will require a track record of consistent income. The standard is a two-year average of your net taxable income.

Seasonal income

Seasonal income is acceptable, but you will likely be required to demonstrate sustainability by providing a two or three-year track record. Usually, an average of income over these years will be used for qualifying purposes.

Overtime

If you want to use overtime for your qualifying income, most lenders will want to see a consistent history; typically, a two or three-year track record of your overtime income.

AISH and Pension Income

Guaranteed pension incomes are usually acceptable sources of income, although some lenders are hesitant to lend if a borrower’s sole source of income is AISH (Assured Income for the Severely. Handicapped).

Child Tax Credit

The child tax credit may be considered by some lenders. Ask me for more information if this is income you would like to have considered with your mortgage application.

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Eva Poulson Mortgage Broker
BC & Alberta Mortgage Broker

Eva Poulson

When I'm not breaking the knuckles of different lenders for better mortgages for my clients - I'm kidding (or am I?) - you can usually find me visiting with friends or family, writing for this blog, or doing my best to keep from capsizing a dragon boat!

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