Buying on Commission or Bonus Income
If much of your income comes from commission or bonus, you have probably worried a lender will discount it. The good news: variable income counts — the key is a documented history that shows it is stable and likely to continue.
How variable income is counted
Lenders generally look for a two-year history of commission or bonus income and often average it to arrive at a reliable monthly figure. Steady or rising variable income over that period is treated as dependable; a single big year is harder to count fully. The pattern matters as much as the peak.
How to present it well
- Keep your tax returns, W-2s and recent pay stubs organized — they tell the story.
- Be ready to show the history and consistency of your commission or bonus.
- If your income is trending up, that helps; if a year was unusual, be ready to explain it.
- If your documented income understates your real earning power, ask about a bank-statement approach.
If your most recent year was exceptional but your two-year average is lower, know that lenders lean on the average. Plan your purchase around the number underwriting will actually use — we will tell you what that is before you shop.