Using Disability Income To Qualify For A Mortgage

My friend Ed Silva commented on the blog that I wrote as an introduction to this series of difficult income source to use in qualifying for a mortgage, and suggested a couple of income source for a blog.  Since Ed took the time to comment and suggest topics, I will try to comply with his request.  I will address Ed's suggested income source, Disability Income first.

Using Disability Income To Qualify For A Mortgage is not easy, but it can be used.  The reason why it is not easy to Use Disability Income To Qualify For A Mortgage is because in most cases Disability Income is short term.  Qualifying for long term disability is not easy, and most of the time it requires applying for it several times before it is granted.  Just because it is expected that the Borrower's short term disability will result in long term Disability Income, does not mean that the short term Disability Income can be use to qualifying for a mortgage.

The dificulty in Using Disability Income To Qualify For A Mortgage, is in proving that the Disability Income is going to continue for at least 3 more years from the Closing Date of the mortgage.  I hope everyone is starting to see that 3 years of continued income is a magical number.  In proving that the Disability Income will continue for at least 3 more years the Borrower will need to provide the following:

• Documentation that states an expiration date, which verifies that the remaining term of the Disability Income is at least 3 more years.
• Verify the amount of disability payments.  This can be done by providing a copy of the Borrower's:
• Disability Policy, or
• Benefits Statement
• Verify the Borrower's current eligibility through the benefit payer:
• Insurance Company
• Employer
• Or other qualified disinterested party
• If the Borrower is currently receiving Short Term Disability Income payments that will decrease within the next three years, because they are being converted to Long Term Disability payment.  Then the lower, Long Term Disability payment is what will be used to qualify for a mortgage

Providing the above proof and documentation to Use Disability Income To Qualify For A Mortgage may not seem very difficult, but I assure you it is more difficult that it may appear. 

Ed's second suggested Income Source was Self-Employed income.  This one is going to be more difficult to do in just one blog, but I will attempt to keep it to one blog and still provide enough information.

 

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com