Schedule E Gain/Loss: How It Impacts Mortgage Qualification

Your IRS Schedule E can meaningfully change how much income a lender will use for mortgage qualification.

Why It Matters

Lenders often start with net Schedule E income/loss, then add back certain non‑cash or allowable items (e.g., depreciation, insurance, mortgage interest, property taxes, HOA dues, amortization/casualty).

Scenarios

• Showing a Gain: Can boost qualifying income, especially with stable months‑rented.
• Showing a Loss: May reduce qualifying income unless add‑backs outweigh the loss.

Pro Tips

• Document months rented for each year — lenders often normalize to a monthly figure.
• Be ready with insurance/tax/interest documentation to substantiate add‑backs.
• Understand how current mortgage, taxes, insurance, and HOA interact with lender calculations.

Estimate your lender‑style monthly figure using our Schedule E Calculator.

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