When qualifying a homebuyer for a mortgage, lenders need to verify that the borrowers have a steady income. If you have an irregular or variable income,  this process becomes more complex. It’s possible to purchase a home with a variable income, but it does take some extra considerations.

Here’s what you need to do:

Keep all documents up-to-datemortgage application

When you have a variable income, it’s important to keep all your documents up-to-date, so your lender has the most relevant information. Provide your lender with the following:

  • Proof of income
  • Bank statements
  • Proof of investment assets and savings
  • If renting, proof of making the rent on time from the landlord

When purchasing a home, you must also provide proof of identity, your list of debts, credit score, and other documentation. Keep track of how much money you’re making each month and update any relevant documents when changes arise. Doing so will ensure your variable income is clear of any major financial decisions you have in the future.

Keep a good credit score

Improving your credit score will go a long way in getting approved for a home loan with a variable income. A good credit score shows the lender that you can manage debt responsibly. Aim for a score of at least 650-700.

A good credit score will give you a better chance of getting approved for a loan, lower interest rates, and a larger loan.

Get the right paperwork

You’ll need to sign a Form 4506-T, granting your lender permission to access your tax returns. In doing so, you will be showing your lender that you are transparent about your income. You will also need at least two years of tax returns and an explanation of income trends, such as seasonal income drops. Be ready to explain income trends to your lender.

Secure a healthy down payment and have good savings

You’ll want to have enough savings to put down a big enough down payment to be attractive to buyers and lenders.  However, you don’t want to drain your life savings. Tell your lender if  you need to make a smaller down payment.  Your lender can help you make a healthy homeowner’s budget so you don’t have  to juggle monthly payments and other debts. At, we want you to be happy with your loan over the long term.

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The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.