were going to come from).
There’s also disability income. When a person is on permanent disability, they receive monthly payments via the government from the social security administration. In many cases, these payments will come for the rest of the person’s life, which makes the bank feel secure. However, these payments are often very low amounts, depending on certain factors, and are unlikely to change with the economy. That means a disability check of $3,000 a month might seem good now, but what will $3,000 a month be worth 10 or 20 years from today? A good lender will think about these things. We’ve already discussed the loan problems facing people who are self-employed, but it’s worth bringing up again here, as self- employed income is a certain quality of income. The two biggest issues that this kind of income brings up for a lender is that there is a lot more paperwork involved and the borrower needs to have at least two years of full-time self-employment to even begin to qualify. Even if the borrower makes a ton of money owning their own business, a good lender won’t care unless there’s documentation to prove it and that the documentation shows over two-years of solid revenue. Another type of income is contract labor and/or temporary work income. In these situations, borrowers are likely to have income that varies wildly throughout the year, i.e, they make a lot of money some months and very little in others. This can look bad at first, but borrowers who keep meticulous records of their jobs and income can get a loan easily in this situation, assuming that they make enough money overall to pay their bills. However, some contract laborers end up getting government unemployment assistance at some point in their lives. This might be due to seasonal work or the closure of a business that was once a reliable employer. This also looks bad at the start, but if the
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