Income level determination

[CoderBlix]

My spouse makes very good income (2011 W2 = 280K, 2010 W2 = 230K) but it is largely commision based. Base pay is 81K + credits for phone/car/... My question is - When calculaing how large of a mortgage we can afford (just based on my spouses income) will they use the W2 amount or some variation based on the fact that the income os commision based? Just to complete the picture (based soley on income and expenses) wages are as noted above with monthly expenses right at 3K. Roughly how large of a mortgage should we eligible for based on these numbers? Any idea?

[hegemony]

In my experience, W-2 wages are used. My spouse's get about 40% of her income in the form of bonuses.

[jop3]

Commissions can be used as long as there is at least a 2 year history at the same job of receiving the commissions. Lenders will just average the 2 years commissions and use that with the current base salary for qualifications.

[CoderBlix]

1332530390[/url]' post='4648908']

Commissions can be used as long as there is at least a 2 year history at the same job of receiving the commissions. Lenders will just average the 2 years commissions and use that with the current base salary for qualifications.

Thx for the replies Hedge and Jop3. Another wrinkle...spouse had commision structure changed early this year and we are now expecting my spouses 2012 income to drop quite a bit. Income should be somewhere in the range of 180K for 2012. I also went back to the W2s and had a few numbers wrong. Earnings were:

2009 W2 179K2010 W2 214K2011 W2 312K2012 W2 ??? Expecting something in the range of 180KThese are the medicare earnmings...I am guessing from other threads that this is the right box to be using...

How will this drop in income be treated? Will it be considered or will they just use the 2010 and 2011 W2s?

 

 

 

[tiggerlgh]

1332530390[/url]' post='4648908']

Commissions can be used as long as there is at least a 2 year history at the same job of receiving the commissions. Lenders will just average the 2 years commissions and use that with the current base salary for qualifications.

Thx for the replies Hedge and Jop3. Another wrinkle...spouse had commision structure changed early this year and we are now expecting my spouses 2012 income to drop quite a bit. Income should be somewhere in the range of 180K for 2012. I also went back to the W2s and had a few numbers wrong. Earnings were:

2009 W2 179K2010 W2 214K2011 W2 312K2012 W2 ??? Expecting something in the range of 180KThese are the medicare earnmings...I am guessing from other threads that this is the right box to be using...

How will this drop in income be treated? Will it be considered or will they just use the 2010 and 2011 W2s?

 

Just make sure you buy a house that you can afford on 180k. Just because a bank MAY allow you to borrow a little more only use what you are comfortable with. When I bought I set my own limit, eventhough the bank would have lent me more.