Title says it all. Will a mortgage lender look at my AGI or my gross income when considering lending to me?

I'm trying to get qualify for a mortgage next year and I'm wondering if I should be more conservative with the deductions that are available to me.

  • 1
    The important ratio for mortgages is debt to income, and they use gross income for that.
    – Hart CO
    Commented Nov 15, 2017 at 22:58
  • @HartCO Man you are on top of all my questions thank you. So what you're saying is, take all my deductions, a low AGI isn't going to hurt me? Does it make a difference that I'm self employed? If you answer this question instead of commenting I'll upvote you.
    – hortstu
    Commented Nov 15, 2017 at 23:00
  • They may look at both. Some want your full tax return for the last year or two.
    – MikeP
    Commented Nov 22, 2017 at 21:26

1 Answer 1


The important ratio for mortgages is debt to income, and they use gross income for that, so don't fuss about AGI.

Not all income sources are treated equally, W2 income gets less scrutiny. If you are self-employed, they'll use tax returns for the last 2 years to assist in determining how much of your income they'll count toward mortgage qualification purposes. If you own rental property, they typically only count 70% of your income and only do so after you've been collecting rent for 2 years. Not all lenders are identical.

I suggest sitting down with a lender (I prefer local credit unions, but there are plenty of lenders out there) and talking through some qualification scenarios. I wouldn't authorize a credit inquiry, but they should be willing to help you get an idea of how much you'll qualify for. I also suggest buying way below the max they'll lend if at all possible, much more comfortable with some breathing room in the budget.

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