Does the number of dependents you have affect your ability to qualify for a mortgage?
The answer to your question depends on the type of mortgage program. As we outline below, the number of dependents you have can directly or indirectly affect your ability to qualify for certain mortgage programs.
Conventional Mortgage. The number of dependents you have should not directly impact your ability to get approved for a conventional mortgage -- which is the most common type of mortgage program -- or the loan amount you qualify for. Instead, lenders focus on your debt-to-income ratio, which is calculated based on your monthly gross income and debt payments, to determine the mortgage you can afford.
While applicants with a larger family may have higher monthly debt expense, which reduces the loan you qualify for, this impact is only indirect.  Although you are required to list the number of dependents you have on your mortgage application, this information does not directly affect if you qualify for a conventional mortgage. In other words, as long as you meet the lender's debt-to-income ratio requirement you should not be penalized for the number of dependents you have, large or small.
The table below shows conventional loan terms for leading lenders in your area. We recommend that you contact multiple lenders to learn more about their qualification guidelines. Shopping lenders is the best way to save money on your mortgage.
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VA Mortgage. When you apply for a VA mortgage the lender is required to determine your residual income after taking into account your mortgage payment, property tax, homeowners insurance, monthly debt payments and other housing costs including utilities, maintenance and homeowners association (HOA) dues, if applicable. In short, the lender needs to verify that you have enough money leftover to cover your monthly living expenses.
The amount of residual income you are required to have depends on both where you live and the size of your family. The more dependents you have and the larger your family, the more residual income you are required to have to qualify for a VA mortgage. For this reason, the number of dependents you have directly affects your ability to qualify for the loan.
Lenders use a VA Loan Analysis form to calculate your residual income to assess if you are eligible for the mortgage. You are required to list the age of any dependents on this form so that the lender can determine the size of your family and your residual income requirement.
Use our VA MORTGAGE QUALIFICATION CALCULATOR to determine the VA loan you can afford
USDA Home Loan. To qualify for a USDA home loan you must earn enough income but not too much. Program guidelines apply a household income limit and if the combined income for members of the applicant’s household exceeds the limit, you are ineligible for the mortgage. The income limit for a USDA home loan is typically 115% of the median household income for the area according to the U.S. Census Bureau.
To determine the applicant’s household income, the lender adds the monthly gross income for everyone who lives in the property but also makes subtractions based on the number of children, full-time students, disabled individuals and elderly individuals who live in the property. In this scenario, having more dependents or children is beneficial because it reduces your adjusted household income, which the lender uses to determine if you are eligible for the loan.
This is a rare case of when having a lower income can actually help you. Simply put, having more dependents may help you stay below the household income limit and qualify for a USDA mortgage.
Use our USDA HOME LOAN QUALIFICATION CALCULATOR to determine the USDA mortgage you qualify for
Low Down Payment Programs. Similar to the USDA home loan program, some low down payment mortgage programs apply borrower income limits. These income limits may vary depending on the size of the borrower’s household. Additionally, how your income is calculated may be affected by the number of dependents you have.
Because qualification guidelines vary by loan program we recommend that you contact the program provider to understand if income limits apply and how the size of your family or household affect your ability to qualify.
Review Best Low Down Payment Mortgage Programs
Sources
"Chapter 4.9.e. Balance Available for Family Support." Lenders Handbook - VA Pamphlet 26-7. U.S. Department of Veterans Affairs, 2020. Web.
"Single Family Housing Income Eligibility." Single Family Housing Guaranteed. U.S. Department of Agriculture, 2020. Web.
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