Mortgage  Question?
Are Payments Received Loan My Name Income for Mortgage?

I took out a line of credit for my sister. The line is in my name but my sisters pays me monthly for the loan. When I apply for a mortgage is the money I receive from my sister counted as income that offsets the debt expense from the line of credit?

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

From a lender's perspective, because the line of credit is only in your name and not your sister's name, you alone are legally responsible for the loan and the money you receive from your sister is not factored into your income to calculate your debt-to-income ratio when you apply for a mortgage. From the lender's standpoint, your sister has no legal obligation to continue making payments so they do not include the payments she makes to you in your income. One point I should make is that if you plan to sell your home and pay-off the line of credit before you buy a new home then the line of credit is not factored into your debt to determine your debt-to-income ratio.

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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.  Harry is a licensed mortgage professional (NMLS #236752). More about Harry

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