Bonuses as Income?

[MBOhio2]

From what I understand, mortgage lenders take regular bonuses and basically add them up and then divide by 24 to come up with an "average monthly bonus income" to calculate income for DTI. However, how would they treat a sign-on bonus? I received an annual bonus, but also recevied a large sign-on bonus in Feb 2010 when I changed companies (same job category). Would the sign-on just be viewed as a regular bonus and calculated the same way?

[Anonymous]

Actually it would not. The reason is that it is a one-time bonus, and would not be expected to continue into the future.

[MBOhio2]

That is what I thought, but wanted to double check to be sure.

My regular, annual bonus is actually paid out in two installments at two different times a year (Feb and Aug). I have only been at my current employer for about 18 months and have received one August bonus and one February bonus. Based on my reading of other similar posts, it sounds like I would take those amounts and divide by 24 to get a monthly bonus amount, but is that actually correct since it's really only taking one year's worth of bonuses into account??

Also is there any documentation required for bonuses? Or will it just be evident from my tax return/paystubs that I received a bonus?

[Anonymous]

A Verification of Employment from the employer will break it out.

[MBOhio2]

Aha, I didn't realize that the mortgage lender would request an actual document from my employer that explains this... now that makes sense!