Nontaxable Income and Mortgage

[kay008]

I don't plan to purchase a home for 2 years but I want to make sure I have all my ducks in a row. Currently, all my income is nontaxable. This is VA disability, child support and rental income. Will this be acceptable income for a mortgage if I will receive all income for at least 8 years? What documents will I need besides bank statements? I would like to buy a home with a purchase price of 250k?

Can I qualify for a 250k mortgage?

 

Details

 

Income in that time frame 5k

Rental income is 500 excess which is included in the 5k

Credit Scores EX 720 EQ 689 Trans 701

 

Property taxes would be around $3500-$4000 *** I qualify for homestead or VA exemption on property taxes of $1200 refund from property taxes***

 

Homeowners insurance between $800-$1000

 

No PMI since VA loan.

[luckydriver]

250K at 4% is 1194 P/I

 

4000 taxes plus 1000 ins is 416 a month

 

1610 would be mortgage

 

5000/month x .29 is 1450 but i heard they will go higher on the front end but i'm not sure how high

[Brian B The Loan Professor]

As long as all of the income can be documented and you can show it will continue you can use it - you may even be able to gross up the amount on some since it is non taxable (count 125% of the income)

[kay008]

I plan to use Navy Federal or Penfed. How much of the rental income will the bank use?

 

I charge $1350 for rent PER MONTH

I pay PM $135 PER MONTH

I pay mortgage of $700 PER MONTH

 

How much of the remaining $515 will the bank document as income? The rental is valued at $184k with mortgage of $138k.

 

Thanks for the help!

[Randomalities]

From what I understand, as long as you've been a landlord for 2 years and have reported it on your taxes, you get to include 75% of your rental income to offset the mortgage. So in your case, if you charge 1350 a month for rent, you get "credited" with 1012.50 a month as income. 1012.5-135-700 = 177.5 of income.

[jst300z]

From what I understand, as long as you've been a landlord for 2 years and have reported it on your taxes

 

Currently, all my income is nontaxable. This is VA disability, child support and rental income

 

Sounds like the op is not paying any taxes: "all my income".

 

I'm not a cpa but I'm pretty sure you have to claim income from rentals. If not, I have been getting ripped off by Uncle Sam for years.

[New2Navy]

As long as all of the income can be documented and you can show it will continue you can use it - you may even be able to gross up the amount on some since it is non taxable (count 125% of the income)

 

Is that kosher ?

 

Because of the way I have it structured, my income is tax-exempt. I always list that on an app and then try and explain it later, but of course they've already run it through their standard taxable income models.

 

So I could list my income @ 125% on an app and then when the documentation shows it lower and I explain that it's tax-exempt and I was merely presenting the taxable equivalent because I know they utilize taxable-income models, they're not going to accuse me of misrepresentation ?

 

 

 

 

[kay008]

From what I understand, as long as you've been a landlord for 2 years and have reported it on your taxes

 

Currently, all my income is nontaxable. This is VA disability, child support and rental income

 

Sounds like the op is not paying any taxes: "all my income".

 

I'm not a cpa but I'm pretty sure you have to claim income from rentals. If not, I have been getting ripped off by Uncle Sam for years.

 

I still file taxes on my rental but I have deductions that makes my tax liability $0.

[jop3]

From what I understand, as long as you've been a landlord for 2 years and have reported it on your taxes

 

Currently, all my income is nontaxable. This is VA disability, child support and rental income

 

Sounds like the op is not paying any taxes: "all my income".

 

I'm not a cpa but I'm pretty sure you have to claim income from rentals. If not, I have been getting ripped off by Uncle Sam for years.

 

I still file taxes on my rental but I have deductions that makes my tax liability $0.

 

If you show a $0 profit on your tax returns for the rentals, they you won't be able to use any income from them.