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Category: Mortgages

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If someone has income that's not reported on their tax return, can it typically be considered in a mortgage application?
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If someone has income that's not reported on their tax return, can it typically be considered in a mortgage application?
Generally, only income that is reported on your tax return can be considered when applying for a mortgage. Unless, of course, the income is legally tax-free and isn't required to be reported.
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If someone is retired and his/her income is from pension or social security, what will he/she typically need to provide to apply for a mortgage?
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If someone is retired and his/her income is from pension or social security, what will he/she typically need to provide to apply for a mortgage?

We will ask for copies of your recent pension check stubs, 1099’s, annual award letter and/or bank statement if your pension or retirement income is deposited directly in your bank account. Sometimes it will also be necessary to verify that this income will continue for at least three years since some pension or retirement plans do not provide income for life.

This can usually be verified with a copy of your award letter. If you don't have an award letter, we can contact the source of this income directly for verification.

If you're receiving tax-free income, such as social security earnings in some cases, we'll consider the fact that taxes will not be deducted from this income when reviewing your request.

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Will overtime, commission, or bonus income be considered when evaluating a mortgage application?
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Will overtime, commission, or bonus income be considered when evaluating a mortgage application?

In order for bonus, overtime, or commission income to be considered, you must have a history of receiving it and it must be likely to continue. We'll usually need to obtain copies of W-2 statements for the previous two years and a recent pay stub to verify this type of income.

If a major part of your income is commission earnings, we may need to obtain copies of recent tax returns to verify the amount of business-related expenses, if any. We'll average the amounts you have received over the past two years to calculate the amount that can be considered as a regular part of your income.

If you haven't been receiving bonus, overtime, or commission income for at least one year, it probably can't be given full value when your loan is reviewed for approval.

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I'm self-employed. How will my income typically be verified after I submit my mortgage application?
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I'm self-employed. How will my income typically be verified after I submit my mortgage application?

Generally, the income of self-employed borrowers is verified by obtaining copies of personal (and business, if applicable) federal tax returns for the most recent two-year period. We'll review and average the net income from self-employment that's reported on your tax returns to determine the income that can be used to qualify.

We won't be able to consider any income that hasn't been reported as such on your tax returns.

Typically, we'll need a two-year history of self-employment to verify that your self-employment income is stable.

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Can someone typically borrow funds to use towards a down payment on a home?
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Can someone typically borrow funds to use towards a down payment on a home?
Yes, someone typically can borrow funds to use as your down payment! However, any loans that you take out must be secured by an asset that you own. If you own something of value that you could borrow funds against such as a car or another home, it's a perfectly acceptable source of funds. If you are planning on obtaining a loan, make sure to include the details of this loan in the Expenses section of the application.
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These questions and answers are provided for general information only and may not be completely accurate in every situation. The information provided is not legally binding on MutualBank or any of its affiliates or subsidiaries. For assistance with specific questions regarding your account(s), please contact us.

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