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Mortgage  Question?
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Can I use pension income to qualify for a mortgage?

Can I use pension income to qualify for a mortgage? I receive several thousand dollars in monthly net income from a disability pension and have saved 25% for a down payment on a home I want to buy.

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

As long as your pension is permanent and not subject to an annual review and renewal then mortgage lenders consider it an excellent source of income. When you apply for a mortgage using pension income, lenders request documentation that outlines the terms of the pension to verify that the pension is permanent due to retirement or disability and not related to a temporary condition. As long as you provide the proper documentation, you should be good to go when you apply for your mortgage.

Please note that when you apply for a mortgage lender use your monthly gross income as opposed to net income to determine what size mortgage you qualify for. You can use our Mortgage Qualification Calculator to evaluate what size mortgage you can afford based on your monthly income and debt. Given the information you provided and your target home price, I imagine that you can qualify for a larger mortgage than you need. Lenders will review your credit score and other borrower mortgage qualification factors, but based on your monthly income and down payment amount you should be in great shape when you apply for your mortgage.

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About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry

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