Mortgage income qualification sources you probably weren’t aware of

Mortgagenomics Canada

The most common types of income when qualifying for a mortgage are variations of salaried, hourly, and self employed income. But what about other sources of income? There are plenty more to be aware of!

Here is a list of some other less talked about forms of qualifying income:

Part-Time Income: as long as the income is guaranteed, you could use 100% of the income as stated in the employment letter and/or recent paystub. A minimum tenure is not required as long as the probationary period has been fulfilled (if applicable)

Fluctuating/Irregular Income (non guaranteed part-time, seasonal income): qualifying income is determined by calculating a 2 year average from any one or combination of the following; Notice of Assessments, Year End Paystub, or T4. In addition, one or a combination of the following will also be required; Employment Letter, Direct Deposit history, or recent paystub. If there is a variation from year to year which is greater than 20%, then the lower of the last two years is used as qualifying income (however, exceptions are always possible on a case-by-case basis)

Pension/Disability Income: almost all forms of Pension and Disability income can be used as qualifying income (public/government issued, insurance company, or previous employer). Refer to the Fluctuating/Irregular Income section for verification document requirements.

Spousal/Child Support: a two-month history of bank statements showing regular support payments and a copy of the formal separation agreement or court order

Maternity/Paternity/Adoption Leave: an Employment Letter is required to confirm that the applicant is currently employed and on leave. Up to 100% of the income can be used to qualify. Some lenders may require that the return to employment be within 12 months (and reduce the allowable qualifying income ratio to 50% rather than 100%)

Investment Income: a 2 year history of investment statements is required to show the customer has sufficient invested assets to support the indicated income

Government Child Care and Social Assistance Benefit (Canada Child Benefit CCB): amount used cannot be more than 15% of all the other income sources for all applicants, child cannot be older than 13 years of age. Child tax credits or refundable tax credits for childcare are not acceptable forms of qualifying income.

Non-Canadian Currency Income: Other than Canadians earning USD income, exception approval is required for other non-Canadian currencies

Non-Taxable Income: most common types are Workers Comp, Guaranteed Income Supplement, and some forms of disability income. If less than $30,000 annual, then 25% gross up is allowed for qualifying income. If greater than $30,000 annual, then up to 35% gross up is allowed. NOTE: Canada Pension Plan and Old Age Security are taxable income sources.

Northern Allowance Income: applicants that receive a Northern Allowance from their employer to assist with the high cost of living in northern or isolated areas

Multiple Sources of Income: totally acceptable as long as standard verification documents can be provided

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