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The Proforma Income Statement (PIS) is a part of a home mortgage loan application. The basic format of the PIS is as follows:
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“I am providing proof of my household income, and this income statement shows that I am a very good housewife and a good mother of four children.” “This income statement includes the gross income from my employment, social security, non-profit payments, a disability pension, and tax payments. All are shown on this income statement.”
The Proforma Income Statement Example provides a baseline income and one of many income sources. In many cases, one may want to show a better source of income than the other, such as an additional source of income to qualify for a higher mortgage interest rate.
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To illustrate the income statement example, a person who earns income from a second job, or a consulting contract, or from hobbies, would not qualify for the higher mortgage interest rate. The individual can usually use a formula that has been used in the past to come up with their formula to figure out how much additional income they have. They would then list the two together and then explain the difference between the two.
The Proforma Income Statement Example includes all types of income from a person’s household income and any other sources that may be listed on the application. For example, if the mortgage interest rate is the same for all three mortgages, but one is a little slower than the other two, then the person would include that difference in the income statement. For example, if someone is currently earning about $4000 a month and has a current mortgage at 3.75%, then they could list that because the mortgage rate is not the same for all three mortgages.
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A Proforma Income Statement Examples used by lenders as a guide when assessing income sources to determine whether or not to approve a home mortgage loan. If someone has a current income of $3000 but wants to get a higher mortgage rate, then they may want to include that difference on their income statement. In this case, they will have to provide another example of their income and they would have to include it on their income statement.
Many people make the mistake of thinking that a mortgage interest rate is just a simple number. It is not that simple, and in some cases, it does have a bearing on the amount of money that they will have to pay back to the lender. By using the Pro forma Income Statement Example as a guide, they can explain why they believe that they are not getting a good deal from their current mortgage.
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