Gross income is used by the mortgage lending community to calculate front and back end qualifying ratios. Mortgage lenders are interested in what percentage of gross monthly income a borrower dedicates to monthly housing expense.

If the mortgage lender requires income information, the loan application must contain the borrower's gross monthly income. Lenders use the income information to qualify the borrower for specific loan programs.

If the consumer is paid monthly or semi-monthly, the gross income calculation is a "no brainer". An annual salary is divided by twelve (12) months to determine income. If the consumer is paid hourly, weekly or bi-weekly, then determining gross monthly income can sometime cause some confusion. Calculating accurate monthly income is necessary, when applying for any loan program. Consumers concern themselves with their net take home pay and their ability "to make the rent".

Mortgage lender borrower qualification guidelines are strictly gross income sensitive. Lenders are concerned about the ability of the borrower "to make the payment".

You need to be a RELDT® member to use the Gros Monthly Income Calculator.