Getting a Mortgage!

[Caleb Ninivaggi]

The basis of getting approved for a mortgage loan...

-for W2 employees the bank basically takes their gross monthly income, they cut it in half and then half the monthly income has to cover the monthly bills on the credit report, and the new payment.

So getting approved for a mortgage is all about fitting a payment into your budget and then that payment will translate to a loan amount

This is in just simple terms, 

For self employed people the bank goes off the net on your tax returns (averages it over 2 years) and then find the average monthly net income and then that is the income used to qualify

But because of covid, the bank for self employed people are requiring a year to date P&L, then they will use the income made this year to determine what you can use to qualify with. 

This is the basis for conventional mortgages

Government mortgages allow 55% of your income to cover the bills on the credit report and the new monthly payment, so a little bit more lee-way.

Whether its conventional, FHA, or VA the monthly mortgage payment cannot exceed 45% of your monthly gross income.

Hope yall have some questions, would love to answer them, just wanted to start my first post off with some basics about how mortgages work in general, but I could write a book on this