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live within your means. a bonus is not guaranteed.
D2: VC and some opportunistic real estate plays have done really well for us. Spouse in PE
In order to use bonus income toward your qualifying income, underwriters want to see that your bonuses are consistent, usually over a 2 year time period. Your best option would be to speak directly with a mortgage broker in your area and to get pre-approved with an initial DU (desktop underwriting) in order to properly assess your specific financial situation. Don’t go through a retail bank since they are often more limited on guidelines and they generally have a slower work process. Mortgage brokers will be able to shop your financial profile quickly and efficiently across multiple lenders to find you the best rate and loan program for your specific situation. Make sure that the mortgage broker reviews your tax returns, pay stubs, credit score, assets, etc, and that they don’t just give you a blind pre-approval. Cash in the bank generally doesn’t matter for mortgage approvals; adjusted gross income (AGI) is what underwriters care about most in addition to adjustments for any debt payments. Of course, underwriters need to see cash available to cover your down payment and closing costs, but generally the ability to show consistent AGI is what is most important to getting approved.
In the Uk (sorry I know you’re NY based but could help?) It’s total comp, as long as bonus levels have been similar for 2 years in a row
Despite bonuses being 1/3 to 1/2 of my pay for 10 years I have never had this question asked by a mortgage company (3 home purchases in the last 6 years). They underwrite my total income and have never asked questions about salary versus bonus other than on the application. I also have pristine credit and no other debts to my name.
My only other advice is to live conservatively and buy your first place based on one income rather than two. You won’t regret it.
Also cash in the bank would generally be reflected in the rate you receive whereas total lending amount would be based on income. If you’ve got a load of cash in the bank your LTV ratio will be lower so you’ll get a better rate.
Cash in bank is also key for coop approval.
Sounds like you would be looking at (for the lender) a buy and hold mortgage as it would be too large to securitize.
So your lender scrutiny will be higher and you need to find the right lender so realistically you need a broker to find that hook up.
Underwriters will typically approve what’s on your 1099/W-2 unless it varies heavily year-to-year. If that’s the case, they will want a breakdown, letter from your employer, etc. Had this happen a number of times (100% of income was commission-based) and they always wanted the employer to basically write that you’re guaranteed the income/bonus, which is next to impossible. Your best bet to get pre-approved through a broker first and see what kinds of loans they can offer (some offer less documentation with better credit/seasoning/cash up front). Then you can get an idea of how much a bank will let you buy.
Several retail mortgage bankers said they will average out your two most recent bonuses plus your current base for your total comp evaluation for mortgage
2 year history of “variable” classified income such as bonus or commission, at the same company is what we will want to see for jumbo loan. Obviously unsure your loan amount your looking for as well as what your county limit is for a conforming loan in NY.
Also you will want 12 months of reserves too for principle snd interest payments, does not need to be liquid.
2-2.2M is about a 2br in the city. I do believe banks look at total comp but they do ask for the most recent 2 paystub and the bonus paystub. I’m currently in contract for a place so I’m going through the process now. I am looking to sell my 2br in FiDi if you’re interested. PM me. I also have a great mortgage broker at WF.
I see, thanks. We’re still undecided on the neighborhood but will reach out if relevant