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Profile picture for user27972584

My payroll is base+commission any way to get a home loan?

Hi I am trying to get a home loan. I got approved for a 110,000$ home loan. Then about 2 days later my loaner called back. Stating that I cannot receive a home loan due to the fact that I am on commission pay. I been with the company for 11 months now. The base pay is 1750 on the 25th of the month, and on the 10th its all commission. Which most of the time is about the same give or take couple hundred dollars. Averages 3500$ a month before tax. Is there a loophole around this??? I dont want to wait 1 more year.. Ive tried a few loan companies chase, wellsfargo, tcf bank with no luck Any helpful information is welcomed Thank you
  • March 20 2014 - Montbello
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Answers (19)

Profile picture for The Mortgage Mark
Yea i just noticed that.  It was at the top of the feed so someone must of replied to an older post.  
  • June 03
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Profile picture for daveskow
OP was march 2014  so assuming he is still on job ...he is now over 2 years  work history :)....good points below  regarding 12 months history  being  possible
  • June 03
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Profile picture for The Mortgage Mark
I guess not.  LP would give a 1 year approval on this.  I am correspondent with Wells and do this all the time.  
  • June 03
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It sure seems Wells Fargo would have run it through LP. They are Freddie friendly.
  • June 03
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Profile picture for The Mortgage Mark
I am reading all of these posts.  Do lenders not realize if you run LP instead of DU they will only call for 1 year of tax returns with this type of income structure?   It amazes me when i read these answers how many Loan Officers are not aware of this.  
  • June 03
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Profile picture for The Mortgage Mark
If you have 1 year of tax returns there is a way to do this. Income would be calculated by the 1 year of tax returns plus your current year to date.  
  • June 03
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  • June 03
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This is a common requirement amongst lenders that many borrowers in your situation struggle with. There is another options, but requires a higher down payment. This option will look at your past 12 months bank statements for your income. So it will not require the extra year that you need. If that sounds better for you, I recommend you consider this option. The best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!
  • March 21 2014
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Hi there -

You can use your base income to qualify.  If you have a 2 year history of being a commission based worker in the same industry there is a possiblity to use your income structure. 

Also - based on the type of loan you are applying for, you might be able to use your commission income as a compensating factor for a higher loan amount.

Either way - I would recommend touching base with a reputable lender to discuss your employment position.  Keep in mind - larger banks generally do not think outside the box.

Best of Luck.

  • March 21 2014
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Profile picture for AshleyConley3

If your commission structure accounts for more than 25% of your pay, home loans call for the 2 year history. If that is the case, some banks can offer you the loan with [usually] 10% down, and a little higher interest rate. That could at least get you the home, and then once the 2 year commission history is established you can refinance into permanant lending as long as you meet the qualifications. It would be ideal to talk to a bank that has both programs to offer: Bank Loans and Mortgage Lending so they can work together for your best interest.

  • March 21 2014
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Profile picture for Primary Louisiana

If you have a history of commission income from your previous company in the same line of work, then it may be doable.  Otherwise you would have to wait if you do not DTI without the comission income.  Good Luck!

  • March 21 2014
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Unless you have 20% down and do a Non-Traditional Loan, I am afraid our hands are tied. I have a Non-Prime Loan Program that requires 24 month bank statements and 20% down payment. So even if you had 20% down, we would have to take the some total of your deposits over the past 24 month and average them. So I don't think that's going to help you.

When you are paid Commissions in addition to being a Wage Earner, we can give you your base, but we need a 24 month history in order to use Commission Income. Then we are required to average it over that same 2 years period. We all have the same rules to follow unless we move to a Non-Traditional Loan. Sorry, but that's where are now.

Best of Luck!
  • March 21 2014
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You will probably need to look into a co-signer and use a Freddie Mac program or FHA depending on a few factors.  That may also open up a little higher price range as I doubt you will find much house wise in the Montbello area for 110k.  Let me know if you'd like any further information.
  • March 21 2014
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Profile picture for davidhawke
You can use the base income to qualify, just not the commission.  So it isn't like they are completely disallowing  all of your income... just the commission.   

That being said, you need to find a co-signer that adds more income to the equation.   As it stands, your base pay would only qualify you for a payment of $560 by itself, and as you know $560 doesn't buy anything here in Colorado. 

Can you get an immediate relative to co-sign?

Also, there is a local lender that has started "stated income" programs back up for self-employed borrowers.   There is a possibility that you could qualify with that program.    Message me through Zillow, and I can give you the name of the lender with stated income loan programs.
  • March 21 2014
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Profile picture for user27972584
From 2008 to october 2012 i worked at a advance auto part at 13$ an hour And from december 2012 to april 2013 at carquest at 13$ an hour as well. Since april 2013 to now at my current commission job. Any loopholes around the commission home loan rules?? Any valuable information is welcomed Thank you
  • March 21 2014
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Quick question, what did you do before this job?  By an chance did your previous employer pay you commission?

  • March 20 2014
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They will only use base pay. Need 2 year history for the commissionable potion, then it will be averaged out.
  • March 20 2014
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Profile picture for daveskow
base pay  is the  amount  you will need to use for  qualifying until you have  2 years of returns to validate receiving the  commission

idea- is it possible to obtain a co- signor  to go onto the loan with you ?
  • March 20 2014
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Lenders are going to allow you to use just the base, but not the commission without a two year tax history of receiving commissions.  Have you received commission pay with your previous employer? Also, you may be able to qualify on just the base, for a $110,000 home loan.  We would need to take a look at your current obligations.  Let me know if we can help!
  • March 20 2014
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