# Residual Income

## What is 'Residual Income'

Residual income is the amount of income that an individual has after all personal debts, including the mortgage, have been paid. This calculation is usually made on a monthly basis, after the monthly bills and debts are paid. Also, when a mortgage has been paid off in its entirety, the income that individual had been putting toward the mortgage becomes residual income.

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## BREAKING DOWN 'Residual Income'

Residual income is often an important component of securing a loan. The loaning institution usually assesses the amount of residual income an individual has left after paying off other debts each month. If the individual requesting the loan has sufficient residual income to take on additional debt, the loaning institution will be more likely to grant the loan because having an adequate amount of residual income will ensure that the borrower has sufficient funds to make the loan payment each month.

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1. ### Is residual income considered profit?

Understand what residual income is and under what circumstances it may be considered profit. Learn how this can benefit personal ... Read Answer >>
2. ### What is the difference between residual income and passive income?

Learn how passive income helps pay the bills with little work involved. Determine how residual income affects your ability ... Read Answer >>
3. ### What is the difference between residual income and operational income?

Understand the key factors that go into calculating operational and residual income, as well as what each of these categories ... Read Answer >>

5. ### How is residual value of assets taxed?

Find out how and when taxes are assessed on the different kinds of residual value, including the residual value on a leased ... Read Answer >>
6. ### How is residual value of an asset determined?

Understand what the residual value of an asset is and how the residual value of an asset is calculated. Learn how residual ... Read Answer >>
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