Q: I have many concerns over what this program is doing to my reported income. If I am trying to buy a car or house and need to provide my income, this is decreasing it. I am concerned over taxes as well even after the reading the educational material.
A1: We completely understand your concerns. Whether you qualify for a mortgage depends on your mortgage lender's standards and requirements. Typically, lenders focus on three things:
- Your gross income
- Your debt-to-income (DTI) ratio
- Your credit score.
HERE you will find an explanation of gross income in particular, and how to calculate it.
In sum, you are not missing anything. Yes, your taxable income changes, but lenders do not factor that in for loans. They look at gross pay, which is unaffected by a Section 125 plan.
For additional questions, please feel free to contact a licensed Benefits Counselor today!
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