Mortgage Tip of the Day- Calculating Overtime and Bonus Income

When trying to calculate OVERTIME and BONUS income, its a little confusing.

Here’s how it works:

1. You must provide a minimum of at least 24 months of overtime in order for us to count it for income.
2. If on your current paystub it shows less than the previous 2 years of overtime, we can only use the YTD (Year-to-Date) Average; the most conservative approach.

Here’s a quick example:

If you made $20,000 in overtime in 2007, $50,000 in 2008, and $800 in 2009 YTD so far, we can only use $400 (the average since we are in February).

Now listen closely. If your overtime DECLINED in the past 2 years, this will have to be reviewed and is subject to review by the underwriter.

Tags: bonus income, fha, fha loan, Houston, mortgage houston, overtime income, texas | Category: Texas Mortgage Info |