Income Stacking: Using Every Dollar Your Household Earns
W-2, 1099, business deposits, rent, and assets can all count in one mortgage file. Most lenders simply never bother to combine them.
Modern households rarely have one income. There is a salary, a side business, maybe contract work, maybe a rented unit downstairs, maybe a brokerage account throwing off dividends. Conventional underwriting handles one or two of those gracefully and tends to lose the rest.
How stacking works
Each income stream is documented using the method built for it, and the results are added. Wages come from pay records and a verification of employment. Contract income comes from 1099s with an expense factor. Business income comes from bank statements or a P&L. Rental income comes from leases and the appraiser's market rent schedule. Assets can be converted to monthly income through a depletion calculation.
The underwriter is not doing anything exotic. They are simply willing to run four calculations instead of one.
Common combinations we see
A salaried spouse plus a self-employed spouse. A full-time job plus consulting on the side. An investor with wages and four doors. A physician with a hospital W-2 and a small private practice. In each case the ignored stream is usually the one that would have closed the gap.
The trade-off
More sources means more documents and a slightly longer underwriting cycle. It is worth it when the extra income moves you into the house you actually want. It is not worth it when the primary income already qualifies you comfortably, in which case a simpler file will close faster and often price better.
Preparing
Write down every source of money your household receives and how it arrives. Bring that list to the first conversation. Deciding which streams to document is a strategy decision, and it should be made before anyone starts collecting paperwork.
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