Q: How Do You Earn? A: Commission Income

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So we’re looking at how underwriting evaluates your income.  Let’s say that you want to use your commission income to qualify for a mortgage.  (This may be in addition to your regular salary income.)  Commission income is a little more challenging than standard salary income.  Here’s what underwriting will require:

  1. You must show a 24 month history of receiving commission income.
  2. Your allowable income on your mortgage application is your average monthly income over this 24 month period.

The documentation that underwriting will require depends on the percentage of your total income comprised by your commission payments.  If commissions comprise 25% or less of your total income, the underwriter will want to review your W-2 forms, 1099 forms related to your commissions, and your most recent paystubs.  Underwriting will not consider any unreimbursed business expenses that you have.

If commissions make up more than 25% of your total income, the game changes a bit and the underwriter will want more details.  In this case, the underwriter must review the documents listed above plus your last 2 years of federal tax returns.  In addition, all unreimbursed business expenses must be deducted from your commission income before calculating your monthly income.

So qualifying for a mortgage using your commission income is more challenging than using only salary income, but it can be done.  If you’ve been earning your commissions for 24 months or more, we can use them to help you buy the home of your dreams.  Are you looking to buy in the State of Georgia and want great mortgage service plus great rates? Then give me a call.  I will help you determine how much income you can use, and I will make sure we deliver the documents underwriting wants in a timely manner, to get you closed on time.

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One Response to “Q: How Do You Earn? A: Commission Income”

  1. Home Buying Preparations – Income | The Mortgage Blog Says:

    […] Commission* – Q: How do you earn? A: Commission income […]

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