# Household Income to apply for a mortgage (my salary+parent's welfare?)



## 12345666 (Nov 20, 2014)

Hi there, I'm looking to be a first-time home buyer myself. I am curious as to whether my mom's income (from welfare, FYI me and my mom live together, i work obvious but she doesn't) can be included in my income since she truly helps pay for our rent. I'm not sure if she can be a co-signer being on welfare (her welfare might stop, not sure though), but is there a way to include her income to my income without her being a co-signer (household income)? Since, even if I alone get a mortgage, she will be helping me with the mortgage payments anyways.

I feel like the ability to include her income in mine would be the difference between getting accepted for a mortgage or not for our desired condo that we have in mind to purchase.


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## iherald (Apr 18, 2009)

My understanding is if she isn't going on the deed and the mortgage, which as you say, she likely can't do, than her income does not apply. There is a difference when you buy a place with a legal apartment in it, then you can use 50% of the rent, I believe. But, in a condo, that's unlikely.


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## Mortgage u/w (Feb 6, 2014)

Looks like this question goes together with your other question in a previous thread.....

Quick answer: No. 

Someone on welfare cannot possibly qualify for a mortgage - let alone the fact owning a property.

If you mom on welfare is the best co-signer you can find, I don't think you are ready to buy a property.

Stick to renting until you can stand on your own two feet. Do not try to take on a debt you clearly cannot handle.


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## 12345666 (Nov 20, 2014)

Mortgage u/w said:


> Looks like this question goes together with your other question in a previous thread.....
> 
> Quick answer: No.
> 
> ...


She will not own the property. I will own the property and I will be applying for a mortgage under my name not hers.


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## Davis (Nov 11, 2014)

My experience was that in considering rental income for the purpose of determining my ability to carry a mortgage, the bank counted 2/3 of the rent from a separate apartment, but none of the rent that I received from my roommate. Will that change if the roommate is a family member? A family member on welfare? I don't know. But I agree with the above comment that if you're depending on rental income from an undependable source to qualify for a mortgage, you're putting yourself at high risk of default if the welfare payments are cut off. I am assuming that kicking your mother out and renting out the room to someone else is not an option here.


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## 12345666 (Nov 20, 2014)

Davis said:


> My experience was that in considering rental income for the purpose of determining my ability to carry a mortgage, the bank counted 2/3 of the rent from a separate apartment, but none of the rent that I received from my roommate. Will that change if the roommate is a family member? A family member on welfare? I don't know. But I agree with the above comment that if you're depending on rental income from an undependable source to qualify for a mortgage, you're putting yourself at high risk of default if the welfare payments are cut off. I am assuming that kicking your mother out and renting out the room to someone else is not an option here.


Here's my situation, me and my mom live together, i work but she doesn't but she gets funds from welfare which is much higher than our monthly rent. We are currently paying our rent half and half. I understand why she couldn't apply for a mortgage or be a co-signer since she cant be on welfare and own a property, even if she gets a mortgage her welfare payments will stop, I understand that. But my point of view is that her welfare income contributes to the our household income AND she is not the one applying for a mortgage nor purchasing the condo under her name. Everything will be under my name but she will still live with me, but since she lives with me and gets income from welfare and pays her share of the housing costs (whether it is rent or mortgage) and living costs, my point of view is that her income should be included in mine when applying for a mortgage, but i am not sure if that is going to work even though it should for the reasons above. Thanks for the input btw.


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## sags (May 15, 2010)

My suggestion would be to find a place you can qualify for solely on your income..........and treat your mom's contribution as paying for food or something else.

Otherwise............save for a bigger down payment to lower the mortgage payments which increases the amount you qualify to borrow.


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## Charlie (May 20, 2011)

Your mom is considered a roommate here. Which, since she is neither a co-signer or on the deed, is what she is....Not much different than if you were renting out rooms that were not separate legal suites.

It may not seem fair, but it does make sense.

Since she is not co-signing, the bank has no recourse against her. You wouldn't include a roommate or tenant's income, so the best you can do is include what ever they allow for rent -- which in the case of shared space is usually NIL.


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## Mortgage u/w (Feb 6, 2014)

12345666 said:


> Here's my situation, me and my mom live together, i work but she doesn't but she gets funds from welfare which is much higher than our monthly rent. We are currently paying our rent half and half. I understand why she couldn't apply for a mortgage or be a co-signer since she cant be on welfare and own a property, even if she gets a mortgage her welfare payments will stop, I understand that. But my point of view is that her welfare income contributes to the our household income AND she is not the one applying for a mortgage nor purchasing the condo under her name. Everything will be under my name but she will still live with me, but since she lives with me and gets income from welfare and pays her share of the housing costs (whether it is rent or mortgage) and living costs, my point of view is that her income should be included in mine when applying for a mortgage, but i am not sure if that is going to work even though it should for the reasons above. Thanks for the input btw.


My full time job is approving (or declining) mortgages. I assess risk for my financial institution in order to grant good loans and decline high risk loans. I can tell you that welfare income is not considered by any lender. I understand your point, but you need to understand that we can only qualify you with the declared income of the applicants who will be on the mortgage. Since your mom cannot be on the mortgage, her income cannot be used....so you cannot qualify.


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## 12345666 (Nov 20, 2014)

Mortgage u/w said:


> My full time job is approving (or declining) mortgages. I assess risk for my financial institution in order to grant good loans and decline high risk loans. I can tell you that welfare income is not considered by any lender. I understand your point, but you need to understand that we can only qualify you with the declared income of the applicants who will be on the mortgage. Since your mom cannot be on the mortgage, her income cannot be used....so you cannot qualify.


That is very discouraging to hear. Thanks for your input though.


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## banjopete (Feb 4, 2014)

Why the desire to get a mortgage? It sounds like your current situation might be a great one to continue renting in so that you can save for owning faster if that's the ultimate goal.


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## 12345666 (Nov 20, 2014)

banjopete said:


> Why the desire to get a mortgage? It sounds like your current situation might be a great one to continue renting in so that you can save for owning faster if that's the ultimate goal.


Because we found a new condo and the price is very good.


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## Plugging Along (Jan 3, 2011)

12345666 said:


> Because we found a new condo and the price is very good.


They will be others that are nice and very good. You may not be ready if you can't afford it on your own.


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## birdman (Feb 12, 2013)

I was not going to wade into this thread but I'm not so sure that things are as black and white as some have suggested. You do not appear to have stated what % down payment you are making and also how close you are to qualifying for a mortgage. Generally, I would say you are out of luck as welfare is certainly not employment income and it is other revenue or income from rental that you require. Others have stated that they will not include include such income which I agree is normally the case. However, lets say you had 40% down payment and your debt service ratios were just slightly out of line, then some lenders may do the deal. You would most likely have to try a credit union or a secondary lender, but I am hesitant in even mentioning the latter.


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## banjopete (Feb 4, 2014)

12345666 said:


> Because we found a new condo and the price is very good.


I'm sure there are some great deals out there currently. Some will offer no down payments, some will offer no strata fees for a year, some will offer you a leased car for a year but it's probably not out of the kindness of their hearts, it's cream off the top. On the flip side it's good to ask yourself why is it such a good deal? Getting over on RE developers is a rare event but good luck to you, a private distressed sale is another matter though which might be the case.


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## uptoolate (Oct 9, 2011)

Also bear in mind that many (most?) prudent people do not take a mortgage for the full amount for which they qualify. As well, interest rates have been ridiculously low for a long time. Consider what your payments will be when rates are a few percent higher than they currently are and what effect it would have on you.


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## dougboswell (Oct 25, 2010)

frase said:


> I was not going to wade into this thread but I'm not so sure that things are as black and white as some have suggested. You do not appear to have stated what % down payment you are making and also how close you are to qualifying for a mortgage. Generally, I would say you are out of luck as welfare is certainly not employment income and it is other revenue or income from rental that you require. Others have stated that they will not include include such income which I agree is normally the case. However, lets say you had 40% down payment and your debt service ratios were just slightly out of line, then some lenders may do the deal. You would most likely have to try a credit union or a secondary lender, but I am hesitant in even mentioning the latter.



If the person had 40% down he or she would probably not be asking this question. Credit unions will not accept welfare payments as income either. A secondary lender would not work as there would not be enough equity in the property to get their investment back if they had to foreclose. If you are looking at a secondary lender to finance the purchase you certainly should not be even considering a purchase.They will usually not go above 80% loan to value. We are all second guessing because the poster has not provide any numbers about income, debts, condo price and the amount of down payment there is along with an indication of the debt being carried. That being said there is one lender still offering 0% down but the qualification required are high.


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## amitdi (May 31, 2012)

12345666 said:


> Because we found a new condo and the price is very good.


You "found" a condo? at a "good" price? so the price is not fair market? Dont mean to demean your statements, but point out that it maybe a psychological excitement. if you found it now, you'll find it when you need it.


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## 12345666 (Nov 20, 2014)

down payment will be 20%


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## dougboswell (Oct 25, 2010)

12345666 said:


> down payment will be 20%


The condo would not be classified as a rental. There are 2 options: put down 5% to 20% and it is a high ratio mortgage and CMHC fees apply. Any down payment greater than 20% will be conventional and no CMHC fees apply. However some lenders bulk insure their mortgages and you might have to pay an insurance fee if the down payment is from 75% to 80%


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