Mortgage  Question?
Drawback of Not Putting Side Job on Mortgage Application

What are the drawbacks of not reporting income earned from a side job on your mortgage application?

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

This is a somewhat odd question because usually mortgage applicants want to include as much income as possible when they apply for the loan. The higher your income, the higher the mortgage amount you qualify for.

Simply put, the drawback to not including income from a side job or part-time job when you apply for a mortgage is that the income is not included in the income figure for your debt-to-income ratio, which potentially reduces the loan amount you qualify for.

If your monthly gross income is high enough to afford the mortgage you want without the side job earnings, then this is not an issue. If you are on the borderline in terms of being able to qualify for the mortgage, then excluding the extra income may be problematic.

Use ourMORTGAGE QUALIFICATION CALCULATORto determine the loan amount you can afford based on your monthly gross income and debt

For example, if you need to make $3,000 in monthly income to qualify for the mortgage you need to buy a home and you only make $2,800 from your full-time job, then you may not be approved for the loan amount you want. If you had a part-time or side job that pays you $500 per month, you could use that additional income to qualify, and potentially even afford a higher mortgage amount.

The bottom line is that your ability to qualify for a mortgage comes down to how much money you make relative to your monthly debt expenses (as well as other factors such as your credit score, employment history and down payment). The more money you earn, regardless of the type of job, the higher the mortgage amount you can afford. In short, excluding income from a side job may reduce the mortgage you qualify for.

Please note that most lenders only include income reported on your tax returns to determine the mortgage you qualify for because they need to verify your income. So if you have not reported side job income on your tax returns, then it is usually not factored into your loan application.

Review Employment History Required for a Mortgage

Additionally, lenders typically require a continuous two year history of part-time or side job employment although only a one year history may be required for stronger applicants, depending on the lender, loan program and other factors.


"B3-3.1-05, Secondary Employment Income (Second Job and Multiple Jobs) and Seasonal Income."  Selling Guide: Fannie Mae Single Family.  Fannie Mae, August 7 2019.  Web.

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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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