Can payout for unused vacation days and sick pay be considered income?

[Ktiz54]

About 6K of my annual income is from payouts once a year for unused vacation days and/or sick days.  It has been consistent for the whole 15 years I've worked there.  My question is whether they will allow me to count that as "income" for mortgage verification (USDA hopefully).  It's not a typical "bonus" and definitely not guaranteed (at least the sick days part).

Any info helpful because that amount would make a difference in the price of the home I would qualify for.

Thanks!

[chris46]

Whether you take the vacation time or not, it is still counted as income. Hopefully you do take some time off, everyone needs a break sometime especially if you have earned the paid time off.

[Ktiz54]

Thanks - that makes sense. 

Ha - I do take a few days off.  I've been helping my 2 kids get through college - last one graduated Friday so my life will be easier now!

[tony46231]

He's talking about a lump sum payout for vacation/sick time that he has not used and if that counts as qualifying income.  Say he makes 50K/year.  He still makes 50K a year if he uses the vacation/sick time.  If he doesn't use it, he gets a payout for unused vacation/sick time.  Let's say that is 6K.  It sounds more like his question is ... Is my qualifying income 50K or 56K? 

Curious to know the answer to that too.  Does it count at all?  Does it get averaged over the last 2 years or even the last 15 years? 

[Ktiz54]

That's my question exactly.  Any mortgage people out there to clarify?

Thanks!

[Peter1142]

I don't see why it would be treated any different than overtime pay. Last 2 years avg.

[cebams]

We are in this situation as well. Our LO was unsure so we are awaiting word from the Underwriter. It will take over a percent off our DTI if we can use it. We are going USDA and this will be the difference between needing a ratio waiver or being within guidelines.

[Ktiz54]

Let me know what the underwriter decides.  Hope they will consider it because that would sure help me too.