Compensating Factors That Can Help Outweigh any negative impacts of your mortgage application.
Exceptional Credit History
Minimal debt
Non-Qualifying Additional Income – All your income is very important in buying a new home, it might not all be considered. Additional irregular income, such as bonuses or overtime, needs to have been happening consistently for at least two years to qualify.
Minimal increase in housing expense
Larger down payment
Significant additional income
Cash reserves
Credit score
Exceptional credit history
Foreign Income
Military benefits
Potential for increased earnings-
Savings Equal to Six Months of House Payments – Having large cash reserves on hand may equate to a compensating factor in the eyes of the lender. Typically, lenders require you to have at least two months of housing payments in the bank. This takes the pressure off the lender because their business depends on you holding up your end of the deal.
