Common questions about income, answered by Mike Swaleh.
Can I get a mortgage if I am self-employed?
Yes, routinely. The thing that surprises most self-employed borrowers is that qualifying income is generally based on net income after expenses rather than gross revenue – which is exactly why a strong business can look weak on paper. There are also bank statement and profit-and-loss programs built for that gap. Worth a conversation with Mike.
How long do I need to be at my job?
Lenders are looking for income that is stable, documented and likely to continue – not necessarily a long tenure in one place. A move within the same field, especially a promotion, is often fine. The case that needs planning is a change in structure, like going from salaried to self-employed. Talk to Mike before you make that move if you can.
Can I use overtime, bonus or commission income?
Often yes, usually with a documented history – commonly two years – so the lender can show it is likely to continue. How it gets averaged varies by program. Bring the detail to Mike rather than assuming it does or does not count.
Can I use Social Security, pension or disability income?
Generally yes, with award letters and proof it continues. Certain non-taxable income can also be grossed up for qualifying purposes, which sometimes helps more than people expect. Mike can tell you how yours would be treated.
Does rental income count?
Often yes, with documentation, and usually at less than one hundred percent of gross rent because lenders discount for vacancy and maintenance. How much counts depends on the program and on whether there is a rental history. Mike can run it properly.
I have a gap in my employment – is that a problem?
Usually not, and it is usually explainable with a letter and documentation. Gaps are common and lenders see them constantly. It is worth mentioning up front to Mike so it is handled early rather than surfacing as a condition late in the process.
Do I need two years of tax returns?
It depends on how your income is structured. Salaried W-2 borrowers often need less; self-employed borrowers generally need personal and business returns. There are also alternative-documentation programs that work differently. Mike can tell you exactly what your situation needs.
Does child support or alimony count?
It can count as income with a documented history and proof it continues, and it counts as a debt if you are the one paying. Both sides matter to the file. Bring the paperwork to Mike.
What if my income is seasonal or irregular?
Variable income is usually averaged over a period, often two years, so the lender can see a stable pattern. Gig and contract income is very common now and there are programs built around it. Mike can look at how yours would be documented.
What is DTI and why does it matter?
Debt-to-income is your total monthly debt payments, including the new housing payment, divided by your gross monthly income. It counts things like car payments, minimum card payments, student loans and HOA dues – not utilities or groceries. Maximum allowable DTI varies by program and by other strengths in the file, so there is no single ceiling I can quote you.
Mike Swaleh, Area Manager · NMLS #739145 · Fairway Independent Mortgage Corporation, NMLS Entity ID #2289
436 Lincoln Boulevard, Suite 105, Lincoln, CA 95648 · mswaleh@fairwaymc.com · Licensed in AZ, CA, CO, FL, GA, IL, KY, MO, NV, NC, OR, SC, TN, TX, WA
This information is not intended to be an indication of loan qualification, loan approval or a commitment to lend. Other limitations may apply. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all dollar amounts. Fairway is not affiliated with any government agencies. Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, License No 41DBO-78367.
Equal Housing Opportunity. Verify licensing at nmlsconsumeraccess.org
