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.

To calculate hourly wages, the mortgage lender uses your pay stub to determine how much you get paid per hour then multiply that amount with the amount of hours you work daily to determine the weekly pay. They then multiply it by fifty-two because there are fifty-two weeks in a year. After they get the product of the two, they divide it by twelve (twelve months in a year) and the quotient or outcome is your hourly wage.

Keep in mind that the lender would like you to be a full-time worker, which is a minimum of thirty-six hours per a week, and would like to have a pay stub or a W-2 form as proof. If you get paid in cash, there are several steps you need to take in order for the lenders to calculate your hourly wage. Your first option is to get written verification of income from your employer and the amount they have paid you year to date. The second option is if you get paid in cash and is unable to get a stub or a W-2, you will have to deposit your pay into your bank account with similar amounts at a pattern that such a lender is able to determine your hourly wage. After you acquire a record pay then you can withdraw the money. Most lenders prefer having a paycheck stub or W-2 because proof of cash payments is long and tedious.

http://www.businessinsider.com/mortgage-bankers-bring-back-the-no-doc-loan-2009-7

A different take on no documentation mortgage loans. A mortgage product that encourages fraud by all parties?

http://market-ticker.org/archives/1199-Mass-Mortgage-Fraud-Is-Coming-Back.html

http://blogs.wsj.com/marketbeat/2009/07/07/goin-back-to-cali-home-sales-in-the-golden-state-are-looking-up/

http://www.kiplinger.com/magazine/archives/2009/08/reverse_mortgage_rescue.html