Blog Category: non-taxable income

Fannie Mae, Freddie Mac, FHA, and VA all qualify mortgage borrowers by using their gross income. You would think they would use net income (after tax income) since a mortgage payment is paid out of after tax income, but they use gross income. I am sure if they suddenly shifted the guidelines to using net income to qualify mortgage borrowers, the allowable debt ratios would go up to compensate for using the reduced after tax income.

In the mortgage world non-taxable income will be grossed up 125%. What this means is Read More