Key Takeaways
- Bonuses count if you have a consistent two-year history.
- Lenders average bonus income over the past two years.
- Employment verification must confirm bonuses are regular compensation.
Do bonuses count toward my mortgage income?
You earn a salary but also receive bonuses, and you want to know if lenders count bonus income toward your mortgage qualification. Bonuses can help boost your qualifying income, but lenders treat them differently than your base salary.
Lenders typically count bonus income if you have a two-year history of receiving bonuses and can show they're likely to continue. The lender will average your bonus income over the past two years to determine how much counts toward qualification. For example, if you received $5,000 in bonuses last year and $7,000 the year before, the lender might use $6,000 as your annual bonus income. Your employer needs to verify that bonuses are part of your regular compensation structure.
Check your employment verification letter to see how your employer describes bonus payments. Look at your tax returns from the past two years to document bonus amounts. Gather pay stubs showing recent bonus payments and any company policies that explain how bonuses work at your job.
Share your bonus history and documentation with your lender during pre-approval. The lender can walk you through exactly how much bonus income counts toward your debt-to-income ratio and loan qualification.
