IRA Contributions and Income For Mortgage Application

[bootyman]

This is a hypothetical question and hopefully someone has some experience with it.  If I made $100,000 last year and made a deductible contribution of 5500 to an IRA, would lender consider my income for a mortgage be $100k or $94.5k?

[jackiechiles2]

If I'm not mistaken, IRA contributions are deductions and do not affect your AGI- which I'm not even sure that's what they look at in the first place. I think they just look at your gross income since they ask you for your last 2 years of tax returns, w-2s and paystubs.   

[rocketman48097]

If you have excellent credit and make that much, you should have no problems qualifying for a very significant loan.  (source:  personal experience)

[27y/oTennesseeRetiree]

It depends on the lender. Many look at retirement contributions as optional. If you need the money you can stop making contributions so they don't count it as an expense. This would be true of 401(k) contributions as well.

[MDM]

If I'm not mistaken, IRA contributions are deductions and do not affect your AGI

IRA contributions are deducted on the front page of form 1040 and directly affect AGI.  But to the larger question - ask the lenders.

[Numbers Man]

Your income is $100k as far as the lender is concerned. The lender looks at salary and usually discounts bonuses. The copies of past tax returns are just proving past income.