Commission Employees

Most commission employees are making less now than they were a few years back. For those who are looking to buy, they may think this will create a big issue. What these borrowers must do, is average out their income for the last 2 years and use that number to try and qualify. Here is an ex., if you are a financial advisor, take the income from 2007, 2008 and the YTD for 2009. You can use the gross income from the W2. The gross income is the one that includes 401k contributions. You will add all of the income, and divide by the corresponding months. In the example above, if you use 2009 YTD to cover up to the end of August, you will be dividing by, 32 months. 32, because you will add 12 months from 07 and 08 and the 8 months you counted in 09. If you use income from a partial month, divide the days you are using by the total days in the month. Ex., if you are counting up to the 15th day of August, you would divide 15/31 = 48.39. The total for 2009 would be, 7.48. The reason is, 7 months from Jan-July because you used the income for the full month, and then .48 for the partial August income. If we go back to the first example and you are going back to 2007, it would be; 12 + 12 + 7.48 = 31.48. You would divide the total income for 07, 08 and 09 by 31.48. You would then use that average to qualify the borrower.

DC Metro area Sr. Mortgage Broker
Rockville Townhomes