personal income is required to qualify and approve you for
a loan. Your personal income is made up of two components
- Employment Income and Other Income.
"Employment Income" is what you get paid for a specified
timeframe by your employer. Generally you must have two years
of income history. In addition - any overtime, commissions
or bonus money you receive can be considered as part of your
employment income as long as you've received it for the last
2 years (can prove that it will continue into the future).
Please note that overtime, commission and bonus money should
be averaged over a 24 month period.
"Other Income" (additional sources) consists of dividends
and interest from stocks, bonds, mutual funds, savings and
checking accounts, CD's, etc. Social security, pensions, disability,
child support, alimony and rental property income are also
considered as "Other Income" as long as you have received
it for at least 12 months and can prove that it will continue
into the future for 36 months.
If you want to claim rental income, you must have a current
signed lease agreement between you and your tenant.
In the case of a recent retirement, we will accept an awards
letter stating your pension or social security benefit.
You will be notified at the time of your approval of the necessary
documentation to substantiate your income.
Using the following formulas can be helpful in determining
your monthly base salary for a mortgage loan.
1. If you get paid hourly:
(Hourly wage) X (No. of hrs worked per week) X 52 (wks/year)
/ 12 = Monthly Base Salary
(Hourly wage) X 2080 / 12 = Monthly Base Salary
2. If you get paid weekly:
(Weekly amt.) X 52 (wks/year) / 12 = Monthly Base Salary
3. If you get paid every two weeks:
(Gross check amt.) X 26 (pay periods) / 12 = Monthly Base
4. If you get paid twice a month:
(Gross Check amt.Commission) X 2 (pay periods per mo.)
= Monthly Base Salary
(Note: Pay dates are the 15th and 30th of every month.)
5. If you get paid annually:
(Salary amt.) / 12 months = Monthly Base Salary
following formulas can be helpful in calculating your additional
Commission, bonus and overtime money must be averaged over
the last 24 month period. For example:
1996 bonus: $10,000
1997 bonus: $25,000
Calculated monthly bonus income = (10,000+25,000)/24
To calculate your net rental income for a specific property,
you must always subtract a vacancy factor of 25% from the
gross rental income received. For example:
Mortgage payment for the property: $450/month
Gross monthly rent payment: $850/month
Net rental income = $850 - ($450 -(450*25%))