The bonuses must be consistent throughout your documented tax returns. Several questions to consider is the frequency of the bonuses. Is it paid annually, quarterly, or even monthly; and what are you likely to be spending the bonus on? If the bonus frequency is applicable to your gross income, the lenders will help you secure the mortgage loan without making you jump through hoops. However, if your bonus is unpredictable then it’s harder to approximate the mortgage loan amount available to you. The last thing a lender wants to see is you not receiving a bonus for some reason, and then fall behind on monthly mortgage payments. All of a sudden, your mortgage loan becomes a risk of defaulting where the lenders might never collect the full amount of the original funds appropriated to you.

You should not factor in bonuses into debt ratios or additional income without proof of consistency. These can include paychecks, or letters from employers indicating how often future employee bonuses are paid. It varies from person to person, and job to job. Some jobs are heavily dependent on bonuses while others are not. The only way to make sure a bonus applies towards your mortgage loan amount is to talk to lenders and qualify your bonuses as documented steady income.

Lenders will also note that if you’re using your bonus to pay off bills and mortgage payments (aka in the lending industry as debt service), then they are willing to factor in the bonus to determine the mortgage loan amount that you can repay in the future. It’s a different story if you’ll be blowing your bonus on a boat or luxury vacations. Lenders actually want to offer you a bigger loan where they can make more money in return. Use this knowledge to your advantage, because well documented bonuses and your commitment to debt service can influence the loan amount that lenders will approve.