Variable income effects on mortgage qualification

[schurchill39]

I just had a quick question on how banks would take your income into consideration if you work on a salary + job bonus basis.

For example, lets say you have a rather low salary of $50,000 a year but with job bonuses you actually make around $120,000 a year. Will banks only look at the $50,000 as your income and base your available mortgage on that because the other $70,000 is "variable"?

[Team_Mclaren]

depends, can you prove that the bonus is consistent? With something like your last 2 years of T1?

[Tripz]

Typically they would use the avg of two years income from your NOA and T1 General (line 150) as income confirmation

[schurchill39]

So if this was a new position and you didn't have that 2 years of proof then they would base it off your guaranteed income? I guess in that sort of deal one could benefit from having an open mortgage then eh?

[Canucks3322]

Damn, what kind of work do you do?

[Team_Mclaren]

Originally posted by schurchill39
So if this was a new position and you didn't have that 2 years of proof then they would base it off your guaranteed income? I guess in that sort of deal one could benefit from having an open mortgage then eh?

that has nothing to do with if its a open/close mtg... It affects the total amount that they would lend you.

[lasimmon]

Are you a wireliner?? Sounds like my old compensation haha

[JDMsomething]

Most of the time they will look at your last 2 years T4's and average them.

Ex. 1 year u claim $80,000 other year you claim $120,000 they will qualify you based on $100,000

[Team_Mclaren]

Originally posted by JDMsomething
Most of the time they will look at your last 2 years T4's and average them.

Ex. 1 year u claim $80,000 other year you claim $120,000 they will qualify you based on $100,000

Need T1, T4 doesnt break down base salary/commission/bonus.

AFAIK they dont take averages, but the latest year income. As long as its the same employment.

[schurchill39]

Originally posted by Canucks3322
Damn, what kind of work do you do?

Originally posted by lasimmon
Are you a wireliner?? Sounds like my old compensation haha

Nope, I work in hydraulic fracturing. I have my degree in chemical engineering but I opted to continue to work as an operator in the field for a bit before I eventually go to the office. I'm running the data van.

Originally posted by JDMsomething
Most of the time they will look at your last 2 years T4's and average them.

Ex. 1 year u claim $80,000 other year you claim $120,000 they will qualify you based on $100,000

Yea thats what I kind of figured. I'm a recent grad so I won't have two years of good t4's for them to look at. I'll just assume what my base salary is as I fool around on the online calculators and what not.