What is the Adjusted Gross Income (AGI)?

With mortgage loans and real estate finance, the adjusted gross income (AGI) is a crucial element of consideration. It helps determine how much real income the borrower or business generates. More importantly, the AGI helps to determine how much the borrower or business can afford to pay on a loan.

For individuals, the adjusted gross income is the consumer’s taxable income after all deductions, carry-overs and adjustments have been included. It is usually found at the bottom of the first page of the IRS-1040 tax return.

The AGI is one of the ways in which mortgage lenders determine how much a mortgage loan applicant truly earns, which helps to determine the applicant’s maximum loan qualification.

If you’re a salaried or wage-earning employee, mortgage lenders do not always use this amount for their gross qualifying income calculation. However, if you are a self-employed applicant, mortgage lenders often include the AGI in its qualifying income calculation.

For more information, see also the following entries:

• :Gross Income:
• :Income Tax:
• :Mortgage:
• :Mortgage Loan:
• rocessing:
• :Qualifying Income:
• :Real Estate:
• :Real Property:
• :Tax Return:
• :Taxable Income:
• :Underwriting: