We all know Vancouver housing prices are expensive, so maximizing your income to maximize your borrowing power is what lots of people are requesting for. Income plays a big part of the mortgage approval and of course, your salary will determine approximately how much you can qualify for. But, we can get a little more with income that you may not know would help you qualify. So let’s get to it!
1. Disability
If you are on a long-term or permanent disability, we can use that as income. Banks may want to see a letter from your insurance company confirming the amount you are receiving. Also, you’ll need to provide recent statements showing the amounts deposited.
2. Child support / Spousal support
Child and spousal support are often available in a breakdown of a marriage. Banks will need to see a copy of the separation agreement which will list out the amount responsible by each party in the relationship. If you have a net gain in the agreement, that amount can be added as income. But on the flip side, if you have net negative, then that will work against you as it will be considered a monthly debt payment.
3. Canadian Child Benefit
YES! Canadian Child Benefit! You can use this as income as well. Simply show confirmation that you do indeed receive it from your CRA profile. There are age restrictions though. Generally, banks are able to use it as long as the child is 12 years old or younger.
4. Maternity leave
For moms-to-be, this is a big concern if you need to upgrade to a new home but you’re no longer working because you’re on maternity leave. That’s ok! Banks can use your full income as long as there’s a letter from your employer stating your return date in 12 months and that you are guaranteed your position and pay when you return.
5. Rental income
If you have a rental property, we can use it to bump your mortgage amount or offset the mortgage payment that you currently have. Banks usually need to see your 2 years of tax filing and tenancy agreement. If it’s a new rental and you don't have that income reported yet, that’s OK! Some banks will allow a market rent report. This is completed by a licensed appraiser and we can project how much you can potentially receive from rent!
6. Investment income - Interest and dividends
Lastly, we can use your investment income. This is usually interest and dividend payments. Same as rental income, we’ll need your last 2 years of tax filing. Banks will use the average amount to determine the income.
And there you go! We just went over alternative income you can use to maximize your income so that you can increase your borrowing power.
If you have more questions of what types of income you can use for your specific mortgage application, please reach out to us and we'd be happy to help!