Mortgage Approval Tips for Buyers with Variable Income


Having a variable income can often make the process of getting approved for a mortgage seem daunting and overwhelming. While traditional lenders typically prefer a stable and consistent income, there are still options available for buyers with a variable income. In this blog post, we will discuss some helpful tips for individuals with a variable income who are looking to get approved for a mortgage.

  1. Gather Multiple Sources of Income Documentation

One of the main challenges for buyers with a variable income is providing enough documentation to prove their income to lenders. This is where having multiple sources of income can work in your favor. In addition to your primary job, you can also include income from freelancing, side hustles, investments, and other sources. By providing documentation for all of these various income streams, you can paint a more complete and stable picture of your financial situation.

  1. Build a Strong Credit Score

Your credit score is a crucial factor in the mortgage approval process, regardless of whether you have a variable income or not. Having a high credit score can demonstrate to lenders that you are capable of managing your finances responsibly. It can also help offset any concerns they may have about your variable income. To build a strong credit score, make sure to pay your bills on time, keep your credit utilization low, and avoid opening new lines of credit while in the process of getting approved for a mortgage.

  1. Make a Larger Down Payment

A larger down payment can help mitigate some of the risks associated with a variable income. By putting down a larger amount, you can lower the overall loan amount and reduce your monthly mortgage payments. This can make you a more attractive borrower to lenders and increase your chances of getting approved for a mortgage. Additionally, a larger down payment can also help you secure a lower interest rate, which can save you money in the long run.

  1. Get Pre-Approved for a Mortgage

Before you start shopping for homes, it’s essential to get pre-approved for a mortgage. This will give you a clear understanding of how much you can afford and help you narrow down your search to properties within your budget. With a variable income, it’s crucial to have a clear understanding of your financial limitations to avoid getting in over your head.

  1. Be Prepared for Higher Interest Rates

It’s important to note that individuals with a variable income may be subject to higher interest rates compared to those with a stable income. This is because lenders view variable income as a riskier investment and may compensate for that by charging a higher interest rate. Be prepared for this possibility and make sure to negotiate with lenders to secure the best rate possible.

  1. Have a Solid Savings Plan

Having a variable income can mean that your income is unpredictable, and there may be months where your earnings are lower than usual. This is why having a solid savings plan in place is crucial. Lenders will want to see that you have the financial means to cover your mortgage payments, even during months where your income may be lower. Having a robust emergency fund and a sustainable budget can help reassure lenders that you are financially responsible.

  1. Consider Using a Co-Signer

In some cases, lenders may require a co-signer for borrowers with a variable income. This means that someone with a stable income, such as a family member, will take responsibility for the mortgage payments in case you are unable to make them. Having a co-signer can help ease the concerns of lenders and increase your chances of getting approved for a mortgage.


In conclusion, having a variable income does not automatically disqualify you from getting approved for a mortgage. By following these tips, you can position yourself as a responsible and capable borrower to lenders. Don’t be discouraged if you receive rejection initially as there are many alternative lenders and programs available for individuals with a variable income. With determination and preparation, you can achieve your dream of homeownership.