The short answer is: All kinds! The type of income used for qualifying will be based on several factors. Mainly it is based on specific regulations/requirements set by the Lender. As a mortgage professional it is our job to evaluate your situation, and choose a lender with the capabilities to maximize your qualifying income. Whether you have a salary, are new to your job, are self employed/incorporated, are working ‘gig work’ or make income from rental properties; There is a lender to work with your income situation.
I will be discussing the difference of working a full time permanent position vs being self-employed.
Full time permanent
When you are working full time with guaranteed hours or salary, it is possible to get an approval with as little as two weeks on the job. Initially, all we need is a pay stub showing full time hours and a job letter showing guaranteed hours. One thing to note is that you cannot be on the probationary period at your job. Another factor to be considered is how long you have been in that specific industry (ie. Construction, Healthcare, Education, Customer Service…)
Yes it is possible to qualify with only having been in business for 3 months! Through bank statements we can calculate your ‘annual income’. This is only possible with adequate downpayment (at least 20%). The longer you've been in business the better!
If you have a two year history then it’s more of a simple process, we will take a look at your tax returns. Your qualifying income will be your net income that you claimed on your taxes.
Net Taxable Income = Gross income - Write Offs
There are situations where we can increase your income, depending on the tax bracket and the type of business you are running (sole proprietorship vs corporation). However, at the end of the day, mortgage qualification is definitely case-by-case.
All in all, if you make money there is a possibility to use it for qualification. With there being so many variables it is best to reach out to a mortgage professional and talk with them about your situation. Generally speaking, the longer they have worked that job or have been in that industry the better. Financing in all situations can be considered, but it will depend on the situation as a whole.