As lenders consider how much of a loan to give you, they want to have proof that you have the ability to payback a loan. They verify this by checking your credit score, and by requiring proof of income.
As a rule of thumb, whether you are self-employed or employed by somebody else, you will need to provide bank statements, demonstrating how much capital you currently have.
Beyond that, you will need to have proof of consistent income. If you are employed, you simply just need to submit your previous three or four paystubs, proving that you are indeed making money.
If you are self-employed, you will need to submit tax returns from the previous two years.
Full time vs part time
A lot of people ask if they can qualify for a mortgage on part-time income. The short answer is yes!
If you have a part-time job, simply provide your last three or four paystubs to prove that you have a stable source of income.
If you have a part time job or other source of income in addition to a full time job, you may need to provide documentation going back two years to prove that it’s been a steady source of income. Lenders don’t want you to have to push yourself beyond unreasonable measures for a loan, as you will be a higher risk. However, if you can prove that you can maintain the additional part time job, then it will be a good qualifier.
Note, you may not be able to get as high a loan if you only have one part time job.
Other Sources of Income
There are several other sources of income that can qualify you for a loan. This may include but is not limited to:
- Rental property income
- Military basic allowance for housing
- Trust fund
- Life insurance cash out