Showing rental income if you haven't filed taxes.

[Kaizen Christian]

So we have a situation where my fiancee bought a house so that his mom and family ( brothers/sisters ) can all be together as they transition to the US.

The thing is that now, he is having a family of his own, and we are thinking of the option to get a second home for ourselves and his family can remain at the original house paying the mortgage.

So over the years, they have been contributing to the bills by making payments with checks. However, he's never thought of it as rental income and never filed taxes.

My concern is... now that we are looking into getting a second home, our debt to income ratio is pretty much wiped out by this existing mortgage even though they give enough to cover the mortgage ( Currently, its maybe $50 short of the mortgage payment) Of course, us moving would mean that they would have to cover the mortgage, plus extra for reserves, HOA etc. Needless to say, it would be adjusted accordingly.

Question 1: In your experience, do you know if a bank would consider past checks as proof of additional income even if no taxes were filed?

Question 2: Can we go to a CPA to refile the 2015 taxes, file 2016 year correctly, which can show 2 years worth of rental income?

Question 3: If not, then is the only option via traditional bank to file 2016 and 2017 to meet the 2 year requirement before a bank would consider this mortgage taken care of?

FYI, the house was purchased while the market was bottoming so if renting to family doesn't work, we are in a good position to rent or sell without strain (at least without financial strain).

I appreciate the feedback!!!