Income

Your 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.

Determining 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

or

(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 Salary

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

Other Income

The following formulas can be helpful in calculating your additional income:

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%))