Income and financing

2 Replies

Hi everyone,

I am a vet and using post 9/11 gi bill which gives you non taxable housing allowance while attending school. In the area I am in ( 40 mins to Boston) and this allowance is enough to support my family. I have read that this is not seen as a source of income by banks because they see it as non long term, which is true. I am weighing my options about how to obtain a loan with technically no income (partnering with family or friend) for my first investment. Once I am over this hurdle and hopefully receiving some passive income, will any lenders see this passive income as a significant means of income enough to obtain a future loan? even if the monthly cash flow is relatively low (100-300) for an example?

Also, is there a way to get a loan while having a non taxable income like GI bill military housing allowance?

Thanks!

@Colby Todd I also received monies from the VA while in college and this is just something that lenders cannot count as income. There are loan types out there that don't require "taxable" income but they come from very small banks. I'll assume that you have assets, since a down payment would be required, so a small bank might base their loan on your personal profile, assets included. I have even seen loans that just lend on the cash flow of the property. Some of those loans require experience in property management from you but some will not. Any of these loan types that ignore standard income will carry a higher interest rate, likely will be an adjustable rate mortgage, have higher downpayment requirements, and sometimes are only 15 or 20 year loans...which also makes your payment higher. I'm generalizing here, but to get those lower rate mortgages you need to add up all of your debts and make twice that amount in W2 setting. Again, I am generalizing but that's the summation of it at least.

Hope this helps in some way but tag me if you have any other questions.  Thanks!

@Andrew Postell Hey I appreciate that feed back. So I basically am going to need to shop around for these loans that aren’t standard, but they exist.

Right now I’m gathering the funds for a down payment for my first investment.  I know I’ll need the loan for the rest.