About Your Credit and Income

On Q Financial, Inc. mortgage professionals have the experience and training necessary to identify the home loan program that best fits your situation. Important factors in qualifying for a home loan are your credit score, income and employment history, assets and the Loan-to-Value (LTV) ratio for your loan.

Credit Score

The FICO® credit score is a number based on a formula developed by Fair Isaac and Company and is an important measure that helps lenders gauge how likely you are to repay your debts. To make the most of your credit, pay bills consistently and on time, manage credit wisely and check personal credit scores periodically.

FICO® scores range from 300 to 850 and are kept by three primary credit bureaus (Transunion, Experian and Equifax). The higher your FICO® score (lenders normally look at the middle score as the representative score), the more loan programs and interest rate options may be available to you.  Of course, your FICO® score is just a ranking number and isn’t the only credit data that is taken into account. During your mortgage application process you will have an opportunity to discuss your credit report with your On Q Financial Mortgage Consultant.

While having good credit is important, in many cases having less-than-perfect credit will not prevent you from getting a home loan. Whether you’re purchasing a new home or refinancing, lower scores generally mean fewer financing options. At On Q Financial, Inc. our professional team is skilled in finding mortgage solutions to fit the needs of virtually every buyer.

For more about credit scores and other useful information, or to order your personal credit report, visit:

 

Eligible Sources of Income

The following are several typical sources for the income that must be documented and verified to qualify for a home loan.

  • Salary or Hourly Wage Income
  • Commission and Bonus Income
  • Second Job or Part-time Employment
  • Spousal or Child Support
  • Retirement, Pension or Social Security Income, Government Annuities
  • Interest or Dividends Income
  • Rental Income
  • Self Employed Income

 

Documentation Requirements

Salary or Hourly Wage Income Current pay-stubs covering the most recent 30-day period and two years of W2s are necessary to document your income. Overtime may be used in some cases.

Second Job or Part-time Employment Current pay-stubs covering the most recent 30-day period and two years of W2s are necessary to document this type of income. You must have a history of working a second job for at least two years prior to making your mortgage application.

Spousal or Child Support A court recorded settlement agreement  will be necessary to verify that the support will continue for at least three years from closing , and you will need proof of receiving the support for 6 to 12 months depending on the loan type. Canceled checks or bank statements are a good way to document spousal or child support income.

Retirement/Pension/Social Security A 1099R or annual statement and proof of two months current receipt are necessary to document this type of income. Account statements are necessary to document your income.

Annuities A 1099R or annual statement and proof of two months current receipt are necessary to document this type of income. You also must document that you have sufficient funds to support the same level of income for at least three more years.

Interest/Dividends Two years of complete 1040s, including Schedule A and statements showing enough asset ownership to have interest/dividend income continue for at least an additional three years is necessary to document Interest and Dividend Income.

Rental Income Two years of complete 1040s, including Schedule E, are necessary to document rental income.

Self Employed Two years of complete 1040s are required to document self-employment income. Business tax returns and/or accountant prepared profit and loss statements may also be required. Self-employment income documentation requirements will vary depending on the business structure and loan program.

Note Income To verify Note Income, a copy of the note, verification of receipt of payments for the past 12 months and proof that income will continue for at least three more years is necessary.

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This material provided is for information and educational purposes only.
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