Thank you Frank. I have gotten so many different answers, and I just wanted to verify this with someone that actually has to calculate these ratios and determine gross income! Thank you again. :)

Susie, all income must be reported- BUT as a mortgage banker I know that unemployment income cannot be used by your lender- so you have nothing to worry about. Re your credit score, when you look at the big picture a foreclosure or bankruptcy affects your credit score much worse. So if you get a modification to your existing loan and it helps you stay current that is a good thing.

Susie,

Any income that you're receiving HAS to be reported, whether you want to or not. Your lender is going to request bank statements and other financial documents anywho so they'll see that stream of income. Each lender will determine what they will and won't need anyway but there isn't going to be a way to "beat the system" as far as including or excluding income - if it''s gone into your bank account they're going to see that. It's better to just be honest about it so it doesn't come back to bite you. Files do get audited occasionally and it wouldn't turn out well if they audited your file and charged you with fraud.

As far as credit score goes, there's a lot of speculation on whether most things mortgage related are really going to hurt as badly as they used to due to the massive amount of people suffering right now. After the trial period, you should be able to talk to your lender about taking those off on your credit report as long as your payment has been timely.

Best of luck!