No Mortgage Without a Job?

[Jenna Goldstein]

So I heard you can't get a mortgage without a job. Isn't that illegal discrimination?

[Kevin Romines]

@Jenna Goldstein the ability to qualify for a mortgage doesn't have anything to do with having a job, it is all about the ability to repay the loan. The Dodd / Frank legislation made it a law. So now you have QM mortgages or Qualified Mortgages in which the lender must prove you have ATR ability to repay. These mortgages are both owner occupied and non-owner occupied residential. 

On a QM Mortgage, the income that is derived must be determined likely to continue for 3 years into the future. So if you have disability income and it can be determined through document-able sources that it is likely to continue for 3 years into the future, then the lender can count it and use it to determine your debt ratio. If your ratio is within guidelines, then you good to go on that part of the loan.  

On QM loans, you also can use what is known as asset depletion. This is the case when you have a lot of money that was originally derived from a company 401K or pension plan that is now accessible. They will take the lump sum amount and divide that by 36 months and show income as if you are liquidating that asset account out over the next 36 months. You don't actually have to liquidate the account, but it will be counted as if you did. There are many methods of deriving income. 

From the Dodd Frank legislation, there are lenders that went the Non-QM route and they can do loans that might use bank statements instead of income, or some loans use the rental income only and not look at or take in to account your personal income from any source. These loan are considered business purpose loans and treated differently. 

So to answer you specific question......income does not need to be solely derived from a job.