The Riverside Press-Enterprise
10 creative ways to qualify for home loan
Mortgage rates spiked again. Home prices are popping. And homeowners insurance is one big yikes.
What if a lender says your income doesn’t qualify for a home purchase or a refinance loan?
Besides the obvious math, factchecking or taking out a smaller mortgage, there are a variety of ways to work with your current lender or perhaps find another one.
Here are 10 creative qualifying boosters:
In my experience, the most used income-boosting tool is a nonoccupant co-signer. For example, your parents. All the applicants’ incomes (and debts) are used for qualifying. A trusting relationship on all sides is critical. The co-signers’ good credit is at risk if the primary borrower doesn’t make timely payments.
For those 59½ or older, an IRA pull is a popular income-qualifying booster. The borrower must have at least 36 months of payment reserves in the account. For example, if you were going to pull $5,000 of IRA income per month, you’d need to have at least $180,000 in your retirement account ($180,000 divided by $5,000 equals 36).
Alimony and child support can be counted if there are 36 months or more of future payments coming. For example, alimony and child support timelines tend to be memorized in writing.
Asset depletion is another way to tap investments and turn them “liquid.” The most aggressive program I found was a fiveyear asset depletion formula. Let’s say you have $300,000 in your stock market account. Take $300,000 divided by 60 months to get $5,000 per month of income.
Fog-the-mirror loans are out there. This means income and employment are left completely blank on the loan application. A qualified buyer needs a minimum of 20% down and good credit.
For the likes of gig workers or independent contractors,