When trying to calculate OVERTIME and BONUS income, its a little confusing.

Here’s how it works:

1. You must provide a minimum of at least 24 months of overtime in order for us to count it for income.
2. If on your current paystub it shows less than the previous 2 years of overtime, we can only use the YTD (Year-to-Date) Average; the most conservative approach.

Here’s a quick example:

If you made $20,000 in overtime in 2007, $50,000 in 2008, and $800 in 2009 YTD so far, we can only use $400 (the average since we are in February).

Now listen closely. If your overtime DECLINED in the past 2 years, this will have to be reviewed and is subject to review by the underwriter.

Make sure you catch all this stuff in the beginning if it applies to you when qualifying for a home loan, because if not done correctly, it can cause some EXCRUCIATING HEADACHES later on.