Commission not counting as income for loan?

Hey what’s up everyone, I’ve been an AE for about five years consistently making around 200K selling saas the past 3 or so years. I’ve had lots of friends in sales purchase homes over the past few years. My wife and I are in the market the next couple years but my father-in-law, who is a mortgage broker, told me that you need to have commission from the same exact company for two years in order for it to qualify as income (unless I am selling to the same exact type of company for 2 years, at different orgs). I know there’s a rule on 2 year averages, but the same company thing or selling to same exact type of company threw me off. I think he’s wrong tbh despite being a loan officer for 40 years. (He thinks that since I sold logistics saas and now martech saas, it’s ‘different industry’). As if I went from selling insurance to appliances..


I was shocked by this since how many AEs buy homes, as well as the fact that the average tenure for AEs is usually around a year and a half (or less) per company.


Given that most of us have 50-50, variable splits, have any of you come across the same situation when qualifying for a loan?


real life situation:

Let’s just say you made 200K, 2 years straight but at two different companies.

🏠 Real Estate
💵 Finance
💰 Compensation
15
Pachacuti
Politicker
10
They call me Daddy, Sales Daddy
One - I would consult with a third party to verify what your FiL says.
2- they do often want to see 2+ years at the same company for stability reasons.
3- just call it software sales. They don’t need to know more.
4- show them your W2s. It doesn’t differentiate between commission and base.

Good luck!
Cmash
Executive
2
Enterprise Account Executive
Thank you, great insight
oldcloser
Arsonist
1
💀
@Pachacutispeaketh the truth
HVACexpert
Politicker
1
sales engineer
Perfect advice!
FinanceEngineer
Politicker
0
Sr Director, sales and partnerships
They ask for paychecks, so trying to do that does raise red flags. Just an FYI.
Pachacuti
Politicker
0
They call me Daddy, Sales Daddy
My paycheck just shows a lump sum.
FinanceEngineer
Politicker
0
Sr Director, sales and partnerships
If it’s 3 paystubs, and they are all different, it’s an obvious flag. What others are suggesting is mortgage fraud. Be careful with this.
poweredbycaffeine
WR Lieutenant
0
☕️
#4: That is simply not how loan underwriters operate. They want stubs, usually for an extended period of time.
oldcloser
Arsonist
6
💀
I can tell you with 100% confidence that your father-in-law is incorrect. I have always been on a comp plan with a variable. I have bought 3 houses, including the one I'm currently typing from. We just closed on this one in October. My wife does not work, either. Only my income qualified. It's all about credit score and provable income. If you're 700+ with bank statements and a downpayment you're done.

If you'd like the name of my mortgage broker, feel free to DM.

You can buy a house.
FinanceEngineer
Politicker
2
Sr Director, sales and partnerships
This! A mortgage broker is the right move for you.
Kosta_Konfucius
Politicker
1
Sales Rep
Is there a way you handled this that might be different. Like just sending them a W2 and not giving too much detail on your role?

They only counted my base for my mortgage however they still approved more than my budget and gave me a good interest rate so I did fight back on including commish
oldcloser
Arsonist
1
💀
Honestly didn’t even try to shortcut anything. Sent paystubs and bank statements. Was never even asked to explain the variable. Was only a year and 4 months on the job too. I think underwriting has changed a bit.
oldcloser
Arsonist
0
💀
In the past I’ve been asked to explain the variable. But the base is usually enough provided your debt to income is in line. $100k base and no debt can buy just about anything as long as you’ve got the downpayment.
FinanceEngineer
Politicker
1
Sr Director, sales and partnerships
Yeah, commission is like bonuses. It only counts if it is at the same company for 2 years+. You have to go to a broker or pay a little more since that is industry standard and you need a non-confirming loan by those standards.
Cmash
Executive
0
Enterprise Account Executive
Sounds like brokers have a bit more leeway when it comes to financing vs a traditional bank situation? As in they may overlook those things for the sake of ‘the deal’
detectivegibbles
Politicker
1
Sales Director
As a former loan officer...this is not true.

Provable income for 2+ years. Doesn't get much more complicated than that.

One of my best friends runs his own branch for one of the fastest growing mortgage companies in the country. Happy to connect you, feel free to DM.
Maximas
Tycoon
0
Senior Sales Executive
Appreciate your father-in-law's experience in that field but if I were you I would still definitely consult a bank accountant OTP or even paying a visit to the bank I'll be requiring the loan from, to get the exact conditions and required documents to proceed with the loan and to see if you're qualified or not,and what other conditions you need to meet if you're not yet!
CRAG112
Valued Contributor
0
Account Executive
Sounds like bs.

just tell people you are an advisor if they push for a job title. Show them the W2. Or a weeks paycheck that’s high. Why get crazy about the rest?

remember. They want to fund you. Show them why. Easy close.
WheelofCheese
Opinionated
0
Sales Executive
I ran into this once upon a time. I had the CFO of the company write a letter outlining my guaranteed income that highlighted my employment contract. Just a thought.
Sunbunny31
Politicker
0
Sr Sales Executive 🐰
Bought 2 homes with base + commission and refinanced several times. The longevity with one job really helped, plus a track record of exceeding OTE. The tricky one was refinancing the final time while changing jobs - but really, it can be done.
Cmash
Executive
0
Enterprise Account Executive
So it sounds like when you were refinancing, they only wanted to use your base vs your OTE despite a history of over performance?
Sunbunny31
Politicker
0
Sr Sales Executive 🐰
Usually that’s what they do, but they do cite the over achievement. Anything that makes you less of a risk to lend to is good. Having a fat 401(k), even if you don’t ever intend to tap it, helps too.
poweredbycaffeine
WR Lieutenant
0
☕️
My loan officer said that if I had 12+ months of demonstrable commission earnings from the same org it could count against my qualifying income for my mortgage.

It all depends on the company you work with.
Justatitle
Big Shot
0
Account Executive
So, your FIL's company may go by this policy but it doesn't make it the rule. There's tons of mortgage providers that will be happy to underwrite your loan with a 200k salary and work verification. A mortgage is highly stressful so I hope this helps.
YoursTruly
Politicker
0
Account Executive (SaaS)
Was a broker for 10 years and he is wrong (probably). Write a letter of explanation on why they are the same industry if the underwriters requires it. It ultimately does come down to underwriter discretion in these scenarios. Contact another lender.

Also you should shop rates to a regional lender, broker, and a bank to see the difference in rates. Regional lenders (guild, cross country, etc.) have terrible rates right now. If you are getting a jumbo loan, large banks are beating the market.
maverickmission
Opinionated
0
SDR @ HCM company
As a former loan officer, he is both right and wrong.

Underwriters want to hear a good story about your career. Make it simple for them to understand that you are successful and high earning.

Just tell them you have been in 'sales' (full stop) for x years, no change in industry. Grab a final paystub from previous employer, w-2s and recent paystub and off you go. No sweat.
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