Which term describes the income of a borrower before taxes and expenses are deducted for qualifying purposes?

The term that describes the income of a borrower before taxes and expenses are deducted for qualifying purposes is Gross Income. This figure plays a crucial role in determining a borrower’s ability to qualify for a mortgage loan, as it represents the total earnings that can be considered to evaluate financial stability.

Gross Income includes all forms of income a borrower receives, such as wages, bonuses, rental income, and investment income, before any deductions. Lenders analyze gross income to assess a borrower’s capability to repay the loan, as it provides a clearer picture of their total earning potential.

In contrast, net income reflects what a borrower takes home after deductions for taxes and expenses. Adjusted Gross Income involves the gross income with certain adjustments made, such as deductions for retirement contributions or student loan interest, which is not primarily used in initial mortgage assessments. Refinanced Income is not a standard term in mortgage lending and does not pertain to the initial evaluation of income for qualifying purposes.