Is Your Income Taxable? It Makes a Difference

There are several different types of income that aren’t taxable: social security, child support, alimony, etc.. What this means in the eyes of a lender is that we can gross up that figure. So essentially, if you make $1000 per month in nontaxable income, we would use up to $1250 per month to qualify you! Using the proper figure could be the difference between you qualifying for a mortgage or not.

Barbara and her ex finalized their divorce in 2017. While working through the final property settlement, they agreed that the ex would pay $4000 per month in alimony for the next 7 years. Barbara was also responsible to refinance the current residence into her name…which she found out was becoming an issue. As she was applying for financing, she continued to run into the same issue, you don’t make enough money to afford this home…

The one thing the lenders she spoke with didn’t realize was that under new tax law, alimony was nontaxable income.

Luckily Barbara found her way to me and we were able to get her a proper calculation and complete her refinance.