Can Investment Income Be Used In Calculating Yearly Income?

Dan from Viera, Florida is looking to get his home refinanced to get out of a high interest rate loan. His wife has a regular steady income while Dan is retired. Although Dan does not have a regular income he does however have a large amount of investments and receives an irregular income from those investments. Dan called Robert Palmer after meeting with another lender that has told him his investment income could not be used towards calculating his qualifying income and he would like to know if this is always the case?

Depending on the type of investment accounts Dan has this is not necessarily true. If the money is tied up in retirement accounts then it is handled a little differently than dividend paying investments, there are a few options when it comes to retirement funds. One of those options would be to get setup on automatic monthly distributions which can then be added into the monthly income. Another option would be to take the entire balance divided by 360, the term of the loan, and use that number to determine as the monthly income from that account. Also, if the type of investments are stocks or bonds that pay out a dividend income, whether monthly or yearly, that income can be considered. If that income can prove to have a history of at least two years it can then be turned into a monthly average and included in calculating qualifying income.