I have a gap in my 2022 W2 income due to being unemployed.

I have a traditional IRA account that I can convert to a Roth IRA that would fill this income gap perfectly. I understand the tax implications and that is the whole point.

I am wondering if mortgage lenders would notice/accept the conversion income when calculating the the maximum loan amount?

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Werewolfdad t1_iy3q32b wrote on November 28, 2022 at 3:00 PM

#732,976

> I am wondering if mortgage lenders would notice/accept the conversion income when calculating the the maximum loan amount?

No, it’s not recurring nor is it real income.

You may not even need to worry about it if you have proper paystubs

grokfinance t1_iy3q437 wrote on November 28, 2022 at 3:00 PM

#732,987

No, because lenders are looking at your paystub for income from a job that will be continuing. Income from converting won't help.

[deleted] t1_iy3qheu wrote on November 28, 2022 at 3:03 PM

#733,058

[removed]

FineMoss OP t1_iy3qkhz wrote on November 28, 2022 at 3:04 PM

#733,075

Replying to grokfinance (#732,987)

I thought lenders looked at both paystubs and tax returns? I am trying to get 2022 tax return to match my current salary.

altmud t1_iy3r41c wrote on November 28, 2022 at 3:08 PM

#733,188

Lenders aren't that dumb (well, maybe you could find one who is, who knows). They're looking for recurring real income.

caringexecutive t1_iy3rtro wrote on November 28, 2022 at 3:13 PM

#733,350

Replying to FineMoss (#733,075)

They do, but what you're describing is not income. It will not make up for the gap but depending on what your other paystubs show it may not be a big deal at all.

sol_in_vic_tus t1_iy3ry4c wrote on November 28, 2022 at 3:14 PM

#733,382

Replying to FineMoss (#733,075)

In general, attempts to game your income for qualifying purposes will not help you and may hinder you.

kbc87 t1_iy4fek3 wrote on November 28, 2022 at 5:55 PM

#737,698

Focus more on the paystub than your tax return.. but yes they look at both and they would see that income and know its not from your paystub.. so they may ask where it came from... they're not just going to take a tax return as your salary.

I'd guess you won't have issues if you have your CURRENT paystub that goes back at least a few months.