Frequently Asked Questions

Will my overtime, commission, or bonus income be considered when evaluating my application?

How to calculate overtime or bonus income for a mortgage? 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 Form 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 disrupted, 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.

 

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