Lending Tip Of The Week

Lenders encounter all types of families that need home financing services.  One of the key considerations for every family is how they are going to be able to repay the loan. When it comes to making this determination, every lender must thoroughly understand their client’s qualifying income.

Qualifying income, broadly defined, is what a lender needs to establish in order to make sure the borrower has the ability to repay.  For some clients this is a simple process.  For others this can be a very complex process.

As an example, if a client who has been with their employer for an extended period of time with very consistent income – hourly or perhaps salary – it is much simpler to determine that person’s income as opposed to someone whose income fluctuates.  Clients who derive their qualifying income from commissions, bonuses or even overtime must have their income reviewed more thoroughly as there can be large amounts of variance from week to week.

A strong lender has one goal in mind:  Make sure that the family will be able to pay back their loan without undergoing financial hardship to do so.  To do that, lenders must stay very versed on how people earn a living.  It is not always cut and dry.

If you have questions regarding your qualifying income, or any other part of the loan process, please do not hesitate to ask your lender very detailed questions.  You can always contact the excellent team at HomeBridge Financial Services.