In addition to your credit score, your income is one of the most important factors that is considered when obtaining a mortgage. While many people have a regular salary, many others are self-employed, have just changed jobs or income levels, or earn their money through other sources than a salary.
We’ve tried to answer some common questions below. However, we know that everyone’s situation is different. We can usually work out a mortgage program, even if you cannot conform to standard income requirements.
We’ll be glad to answer any questions you may have about obtaining a mortgage. Just give us a call at 1-800-859-5648, or use our contact form to learn more.
- Last year I made $75,000 …. $25,000 as a base salary and $50,000 in bonus and commission. This year so far, I have made $60,000 in commissions. How will an underwriter evaluate my income?
- If your bonus (or commission) is 25% or more of your total compensation, then most of the mortgage industry defines you as self-employed. The underwriter will ask for the last two years’ tax returns. Your income will be very close to the Adjusted Gross Income on line 31 of page 1 of the tax return. If you own 25% or more of a company, or if you are an employee of a relative – whether or not you get a W2 – then you are considered self-employed and your income is verified by line 31, page 1 of the IRS form 1040, or line 16 of 1040A, or line 4 of 1040EZ.
- Will the answer to the question above change if I put down 20% and request that my income not be verified?
- Yes. There are loans that do not require the verification of income. There are also loans that do not require that you have a job.
- Can I put down only 10% and avoid having my income verified?
- Yes, there are at least 2 ways of doing this. Both methods involve a mortgage with a slightly higher interest rate.