Fluctuating Income Sources for Mortgage Lending

This technical report presents findings from the Mortgage Lender Sentiment Survey regarding fluctuating income sources used in mortgage lending. The report outlines the challenges lenders face when qualifying borrowers with digital gig economy income and variable income. It notes that while a majority of lenders anticipate an increase in borrowers utilizing these income sources, they express concerns over the difficulties in income history and stability requirements. The report details that nearly two-thirds of lenders believe accepting such income will enhance consumer access to credit, yet many find current underwriting guidelines insufficiently detailed. The report also discusses the growth trends of these income types over the past couple of years and expectations for future usage. Additionally, it examines lender perceptions of current lending practices and investor guidelines related to these fluctuating income sources, highlighting the need for more prescriptive guidelines to facilitate the inclusion of variable income in mortgage qualifications.