Mortgage Tip: Employment/Income
When purchasing a home your lender will need to verify what your income is and how long you have been working for your employer. This is done by looking over your pay stubs, W2’s/Tax Returns, and a Verification of Employment.
If you are paid solely on commission your income will be based off of a two year average. If you are paid commission along with an hourly rate, you would need to have been receiving that commission for two years for us to count that on top of your hourly wage. Lenders view bonuses the same as commission, if you have been receiving a bonus then a two year average of your bonuses will be added to your hourly rate.
A self-employed person would need to look at their Tax Returns under the Schedule C, Line 31. We will take an average of the past two years from whatever is showing on your Tax returns (Schedule C). Whatever amount you have on your Schedule C you can add back in the Deprecation to show more income.
In order to be able to count extra income from a part time job you would need to have been at that part time job for two years.
Not all cases require a two year history of employment. If you are right out of school or starting a new job, as long as you are a W2 employee and we can show at least 2 pay stubs we will be able to count that income.