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I think it's ok to include bonuses. No bank is going to get angry at normal variations. I'd say +/- 10%
@wHiTeSoL wrote:I think it's ok to include bonuses. No bank is going to get angry at normal variations. I'd say +/- 10%
That *really* depends whether they think that 10% differential makes you overextended.
I agree with the other posters, I won't put anything for income I can't prove easily either by paystubs or tax returns. I derive an additional 30% compensation between bonus and pension per year, but it'd be all sorts of awkward to claim either potentially except via tax returns in the bonus's case.
Wow, it had never occurred to me to INCLUDE my bonus! Or to use my AGI instead of my actual gross income!
My bonus is small relative to my salary, like 6%, so I don't think it would make me much of a difference in terms of credit limits.
AGI can be affected by what you do in terms of 401(k) contributions and such, so I wouldn't use that. I'd use the regular gross. It's a number you know off the top of your head, probably, and you don't have to dig up any paperwork.
I use my previous year's AGI, mainly because I have a very complicated income. I have a base salary, bonus, and multiple businesses/investments that flow through to my personal return (my personal return I filed this morning was literally 127 pages). I have steadied off over the past few years so if proof is ever required I can use a 3 year tax return basis for income claims. As my loan officer said when buysing my house last year "you claim what you pay taxes on"
@frugalQ wrote:
I include my bonus in my income even though what is on my tax return is lower.
I get my bonus (and an annual raise) in March for the previous year's work, so my pay stubs match what I state although my tax return doesn't.
For the poster who said you can't include bonus for mortgage: actually, some lenders allow you to take the avg of the last two years bonus and include as income....as long as you are w2 and can show that you consistently receive a bonus each year.
Oi vey, that's handy Q, thanks!
Have to see if whatever lenders I pick will wind up playing ball on that one: it'd effectively raise my claimable gross income by an additional $1k/month under that standard. That plus the theoretical raise my silly company has promised in the annual salary adjustment next year, maybe this is doable for a decent house even in the absurdly expensive S. Cali LA south bay area.