Salaried employees provide income verification in the most straightforward manner. This does vary slightly depending on how long you have been receiving the income type. Generally you will require 2 years of income history even if your employer has change. Here are some basic requirements of lenders. Feel free to contact me if you would like my free to you professional mortgage service to get you approved.
Salaried Employees may use 100% of the client’s salary as income with the following documents available to support this income:
Must be current on company letter head (including full address, contact information phone, fax, e-mail) and be signed and dated confirming salaried employment and position, and when applicable, overtime, bonuses, pending increases or car allowances should be documented in the letter.
- Pay stub
Must be current and indicate the rate of pay, pay period, net and gross income, taxes and benefit deductions
Also for salaried employment the following may be used :
Overtime may be used to qualify salaried employment if the borrower provided there is a proven track record and the opportunity for continued overtime exists for the future. At least a 2 year track record.
- Car Allowance
A car allowance may be considered as income for salaried employees if it is a “perk” of the job and a car is not needed to perform the job.
Same documents needed as overtime
- 2 recent pay stubs, job letter and 2 year’s notice of assessments are the preferred documents to confirm your client’s income.
- The job letter must contain weekly average hours worked, hourly rate, year-to-date-earnings, how long employed, position
- The employment letter must be on company letterhead and signed by an authorized person of the company.
- 100% can be used with a letter confirming that you will be returning to the same pay and position.
Child Tax Credit:
- Can be used as long as the children are under 12 years of age. If you have a child older than 12 and a second child younger than 12 then you can use half of the benefit that your receive. The child tax benefit notice and a bank statement showing it is going into your bank account is required.
- Universal child tax credit is paid until a child turns 6. If you have a 5 year mortgage term then it may only be used if the child is 1 or less in age. The benefit notice and a bank statement showing it goes into your bank account is required.
- Can be used if you have documentation on how long you will be away from work and confirmation you are returning back to work with the same pay and position.
Long Term Disability
- These payments can be used as well. Documentation needed is 2 years notice of assessment, a doctor’s note outlining your illness and that it is either progressing or not getting any better, the Lenders may want to see the bank statement to verify that payments are going into your bank account.
Short Term Disability:
- Will need a letter from your employer that you will be returning to work at the same position and same pay when your short term disability payments are finished. Documents to verify that you are receiving short term disability.
- Any pensions can be used as income. Again prove that you are receiving the pensions. So notice of assessment from the last 2 years, copy of bank account, the form that they send you at the beginning of the year stating what your pension will be in monthly payments for the year.
- More and more Lenders are allowing the rental income. You will need a signed lease. The Lenders will look at each case and decide.