Mortgage Question...Gross Vs Reported

[GOOFY4DONALD]

I have a question about a new mortgage. Eventually we will take all of our questions to a professional but we are not ready to take out the loan yet. Since I know many here have some kind of mortgage experience I will ask here first. Now I know the difference between gross income and net income. What I don't know is if the mortgage company is going to use the gross income or the reported income (gross income minus the 401K, health insurance and flex plan). I know what we can afford monthly. I am not looking to max out whatever we qualify for I am just wanting to make sure I am looking in the right price range.
Thanks for the help.

 

[Claire&TheBoys]

They want your gross income. I know the amount we qualified for was more than we were willing to spend monthly, but it does give you an idea of what price range you're in.

 

[GOOFY4DONALD]

They want your gross income. I know the amount we qualified for was more than we were willing to spend monthly, but it does give you an idea of what price range you're in.

Thank you. Our gross is about 15K more than what they reported to the IRS (includes 401K, Insurance) and that does make a big difference on what we quality for. Thanks, again

 

[kathie859]

If either is the case, the underwriter will want to see your tax returns for the last two years and will adjust your income after expense deductions. If you are a W2 employee otherwise the gross is used and is usually averaged over the last two years unless you made less in 2010 which is another issue for an underwriter to consider.

Good luck!

 

[GOOFY4DONALD]

If either is the case, the underwriter will want to see your tax returns for the last two years and will adjust your income after expense deductions. If you are a W2 employee otherwise the gross is used and is usually averaged over the last two years unless you made less in 2010 which is another issue for an underwriter to consider.

Good luck!

We are a W2 couple. We average about a 5% increase every year and have the previous returns to show. Thanks for your help.