{"id":820,"date":"2026-04-05T14:00:43","date_gmt":"2026-04-05T18:00:43","guid":{"rendered":"https:\/\/balancekimmortgage.com\/?page_id=820"},"modified":"2026-04-05T14:01:00","modified_gmt":"2026-04-05T18:01:00","slug":"ok","status":"publish","type":"page","link":"https:\/\/balancekimmortgage.com\/en\/ok\/","title":{"rendered":"Eligibility requirements for a loan"},"content":{"rendered":"

First, Credit Report<\/strong>is fundamental. It is more than a score; it shows your full financial history. Any past mortgage late payments or defaults will likely cause a loan denial. Recent bankruptcies or other negative financial issues will also make it difficult. Over<\/strong>680, most cases are OK. A score of 740 or higher is considered stable. We use the middle score among the three credit bureaus. <\/p>\n\n\n\n

Second, The down payment amount<\/strong>should be over 3%. However,<\/strong> 20% or more is common. Especially if your tax\u2011reported income is low, a down payment of over 20% is usually required. <\/p>\n\n\n\n

The conditions above are simple. If you meet them, it\u2019s OK; if not, it\u2019s difficult.<\/p>\n\n\n\n

Third, How<\/strong>do you document your income? The loan amount you can qualify for is roughly about 3.5 times your income. So if your income is $100,000, you can qualify for approximately $350,000. <\/p>\n\n\n\n

The simplest method is Tax return.<\/strong>This includes your wages and any other regularly received<\/strong>income. This is called a Full Doc or QM loan. <\/p>\n\n\n\n

If you haven\u2019t reported enough income on your taxes for any reason, the lender will not use your tax returns at all. This is called <\/strong>a No (income) Doc or Non-QM <\/strong>loan. These usually require a down payment of over 20%. So how do you document your income in this case? <\/p>\n\n\n\n

1099 <\/strong>- \u201cAll 1099s received up to the tax\u2011filing period are combined and counted as income. Typically, 50\u201390% of that amount is recognized. Bank account statements showing the deposits are often required as well. <\/p>\n\n\n\n

VOE <\/strong>- For W\u20112 employees, the employer, HR, or a manager can issue an employment verification letter. The lender will call to verify its authenticity.<\/p>\n\n\n\n

P&L <\/strong>- A CPA or EA can simply write a letter stating this person\u2019s revenue, expenses, and profit for the previous year. The lender will call the tax professional to verify it. <\/p>\n\n\n\n

Bank Statements <\/strong>- We review the deposits made into your bank account over the past year and count about 50% of the deposit amount as income. <\/p>\n\n\n\n

DSCR <\/strong>- This is when the rent you would receive from the property is counted as income. Lenders typically recognize up to 75% of the rental income when qualifying for the loan. <\/p>\n\n\n\n

Full Doc <\/strong>- If your tax\u2011reported income is not sufficient, you can combine it with other sources to qualify. <\/p>\n\n\n\n

Asset Utilization <\/strong>- This is a simple method. your current cash and cash\u2011equivalent assets are added together and divided by 60 to calculate your monthly income. So if you have around $500,000, it means you can be credited with roughly $8,300 in monthly income. <\/p>\n\n\n\n

Based on this information, you can easily calculate if you qualify for a loan. <\/p>\n\n\n\n

For example, with a 692 score, 10% down, and $150k in reported income, you can get a $500k loan. With a 780 score, 20% down, and the same income, you also get $500k. Simple.<\/p>\n\n\n\n

But if you have a 740 score and 30% down, but only $30k in reported income? Then you\u2019ll only get about $100k. In this case, you can't buy a house with that tax return, so we switch to No-Doc. Then you can get a loan using one of the other methods above. <\/p>\n\n\n\n

Typically, the interest rate for a Full Doc is 0.5% to 1.5% higher than a No Doc. <\/p>\n\n\n\n

<\/p>\n\n\n\n

<\/p>","protected":false},"excerpt":{"rendered":"

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