How things work at The Bank

As you continue to work with the bank there is more for you to know or be very familiar with.

Yesterday we talked about Income, Debt, and Credit Scores.  Let’s take a closer look today at your Income.  There are three definitions of income:

  1. Gross Income – this is the largest amount of money that shows up on your pay check; it is the amount you are paid before anything is taken out.  Don’t forget your paycheck has various deductions.
    1. Federal Income Tax
    2. State Income Tax
    3. Health Insurance
  2. Net Income – your Net Income is the amount left in your check after the deductions are taken.  When you are talking with The Bank this is still not the income they are looking at.
  3. Disposable Income – (Real Disposable Personal Income) this is the one The Bank wants to know about.  Disposable income is your Net Income with more deductions or obligations:
    1. Car Loans – monthly payment
    2. Student Loans – monthly payment
    3. Credit cards – minimum monthly payment

Disposable income is what is left – this money is where your mortgage payment comes from.  So, things like car loans can adversely affect the amount of your disposable income. 

Suggestions:  here are a couple ideas for you to seriously consider:

  1. Car loan – do not buy a car if you are trying to get a mortgage!
  2. Student loans – not much you can do so, cross your fingers and hope for the best
  3. Credit Cards – pay them down and after that apply for a mortgage
  4. Call us with your ideas – (802) 985-5855
  5. Share our Facebook post

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