Non-traditional sources of income that can help you secure financing your next loan
When you sit down to calculate how much home you can afford, it can be difficult to determine which sources of income will count towards a loan and which won’t. Our team frequently helps clients explore every avenue of income so they can borrow what they need in order to secure the home of their dreams.
Here’s three types of income that aren’t salary that you can use to improve your borrowing power.
Short-Term Rental Income
In order to use rental income to qualify, you need to provide a record of the income generated, typically at least two years of tax returns. Many banks will count new rental income generated by an investment property toward your debt-to-income ratio calculation.
Restricted Stock Units (RSUs)
An RSU is stock given by your company as compensation that vests over a certain length of time. They are typically part of offers at technology companies, and are a source of income that our customers often overlook.
HomeStreet allows you to use RSUs when you apply for a home loan. This often makes the biggest difference for our customers seeking Jumbo loans, when borrows may not qualify for a home loan based off income alone.
We recently worked with a client who was declined by a credit union because they needed to use their RSUs to qualify for their loan. This is a common experience with other lenders because they fear that stocks have already hit their highest, and the RSUs will lose, not gain, value over time. However, that’s not always the case— and it’s why Team Petros is happy to use RSUs to help you qualify.
Asset Depletion Income
Did you recently retire, or are you self-employed? With enough assets, you may qualify to use income from your asset portfolio. We’ve noticed more borrowers are in a position where they have a substantial amount of assets they live off of after retirement. If they don’t use a significant amount on a monthly basis, they may be able to use their assets as income to support the underwriting guidelines. These can be very difficult to qualify for and approved on a case-by-case basis. However, we have had luck with getting clients approved lately.
Curious if your non-traditional income sources could help you qualify for the loan you need? Reach out to our team today and schedule a consultation.