Why HOW Your Wages Are Paid Matters To Your Lender

Dec 06, 2020

Cash, income, credit history...the big three of getting an approved home loan. All equally important and all have very specific guidelines and documentation requirements. This article is going to talk about income and why how you are paid could make a huge difference in the amount of the mortgage you may be eligible to borrow.

There are many methods of employment compensation. Just to name a few:

  • Hourly
  • Hourly with overtime
  • Hourly with bonus
  • Salary
  • Salary with bonus
  • Salary with commission
  • Straight commission 
  • Wage paid by your own company (or family business)

Ultimately what your lender wants to establish is the stability and consistency of your income. If you work a standard 40-hour week and are paid hourly or on a set salary; that's the easy part and is fairly straightforward. Anything outside of that gets special attention.

Overtime and Bonus Income

Typically your lender will want to verify that you have received either over time or bonus income for a minimum of two years....

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