Will my overtime, commission, or bonus income be considered when evaluating my application?
In order for bonus, overtime, or commission income to be considered for qualifying purposes, you must have a two-year history of receiving it and also must be likely to continue. The best way to calculate these types of earnings is to provide W2 statements for the previous two years, and the last, year-end paystubs for those same years. We will then remove the regular pay earnings to determine the amount of overtime and/or bonus earnings for the period. Once the overtime/bonus earning have been identified for the two-year period, the amount of earnings is divided by 24 months to determine the monthly average over the past two years. As an alternative, we can verify these additional earnings amounts directly from your employer.
If you have been receiving bonus, overtime, or commission income for two years, but from two different employers, we can, in most cases, use the income if the earnings are made in the same field of work.
Also note that if your year-to-date income from overtime/bonuses/commissions is decreasing over time, or if it is deemed unlikely to continue, they would have to be removed from consideration as viable borrower income.
We will always attempt to approve you for mortgage financing without using these sources of additional income to reduce the amount of documentation in the transaction and streamline the process.
- Why Update A Pre-Approval Letter?
- How do I update an expired pre-approval letter?
- I am retired and my income is from pension or social security. What will I need to provide?
- What if my credit score is too low?
- How do I dispute an item on my credit report?
- Will the inquiry about my credit affect my credit score?
- What is a credit score and how does it affect my application?
- What if my homeowner’s insurance is up for renewal?
- How do I complete the application if I was in school before obtaining my current job?
- Can I use my new job to qualify for a loan if I haven’t started it yet?
- How will rental income be verified?
- I have income from dividends and/or interest. What documents will I need to provide?
- Do I have to provide information about my child support, alimony or separate maintenance income?
- What happens after I apply?
- How will you verify income on a self-employed applicant?
- Will my second job income be considered?
- I have student loans that aren’t in repayment yet. Will those be counted in my debt to income ratio?
- What debt do you include in my debt to income ratio?
- Why do you need information about other properties I own?
- Is a gift from someone else an acceptable source of my down payment?
- What will be required if I withdraw money from a 401(K) account for my down payment?
- What if I’m not sure about the property value, sales price or amount I want to borrow?
- What do I do if I can’t retrieve or print out the electronic disclosures, or have some other problem with them?
- What are some tips for completing the online application?
- If my loan application isn’t pre-approved, does that mean you can’t provide me with financing?
- When will I hear from someone after my inquiry/application?