Salaried borrowers:

• Current gross amount of salary per paystub –
  • If paid on twice a month (semi-monthly), multiply amount by 2
  • If paid every 2 weeks (bi-weekly), multiply amount by 26, then divide by 12
  • If paid every week, multiply amount by 52, then divide by 12

Hourly borrowers:

• Income is averaged using current year to date paystub plus last 2 years W-2 forms (box #1 income) then divided by number of months; i.e. if the current paystub has ending date of 3-15-07, you would have 26.5 months (12 months for 2005, 12 months for 2006 and 2.5 months for 2007).

Bonus/Overtime Income:

• In order to give bonus or overtime income, we need to confirm it has been received for the past 2 years and that it is going to continue. To find this out, we must order a Verification of Employment. If the employer doesn't provide this info, we cannot use the income to qualify, but pending on the lender, we might be able to use it as a compensating factor to offset higher ratios. If the employer verifies the amount and continuance, we will use the averaged amount.

Self Employed or Commission Income:

• Need 2 years federal tax returns and current year-to-date Profit & Loss statement. We will use net profit and add back in depreciation and depletion only, then divide by number of months to get average income.

 Rental Income:

• We will need the last 2 years federal tax returns and current rental agreement. The borrower will be given income of 75% of the 24 month averaged rent shown on schedule E.

Child Support/Alimony:

• Copy of divorce documents or court order to show amount to be received. Depending on lender, you may have to document receipt of funds; i.e. cancelled checks from the other party, bank deposits, etc.

Disability, Social Security, Pension, etc:

• Need current award letter and/or statements.

Dividend/Interest income:

• We will need 2 years federal tax returns and bank statements to show accounts are still open and current balances. Then we will average the income for past 24 months. If you are doing a purchase, the accounts that will be used for down payment and closing costs, will not be included in the average, since the balances will be lower and won't generate same income.