friendlyginge

Account Executive

Valued Contributor

Getting a mortgage with a sales income

I am currently going through the process of buying a house for the first time. I am already conditionally approved for the loan, and I assume that they will be requesting more documents from me this next week. I've been in my role for about seven months, I'm just now ramped, and luckily I've been able to provide paystubs for the past two pay periods with pretty good commission. But if I go back farther, the paychecks are pretty varied (due to commission pay periods, varying commission, etc.) I also gave a pretty conservative estimate on what my annual salary will be.

Has anyone else gone through this process and had any issues getting your loan because of a non-traditional salary?

EDIT TO ADD: well it all worked out, super easy process and they didn't really need too much additional information from me. we closed last week!

🏄 Personal Life

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Kinonez

Celebrated Contributor

6

War Room Enthusiast

When I asked for my first loan I have them my base + required quota, and explained that it could be higher or lower but that should be my avarage. I had no issues.

Justatitle

Big Shot

5

Account Executive

Yes, provided you gave accurate pay stubs and they call the workplace and HR verifies you work there you are good. The mortgage broker has the incentive to get you approved because it is what gets them paid as well. They likely won’t request more documents in terms of pay. Best of luck with the house!

DungeonsNDemos

Big Shot

1

Rolling 20's all day

This was my experience as well. You should be good @friendlyginge

friendlyginge

Politicker

0

Account Executive

Gotcha, I already submitted all my past stubs for the last two years so hopefully that's all they need. Thanks for the reassurance!

TheNegotiator

Arsonist

1

VP of Sales

That should be MORE than sufficient. If you’re conditional after that 99.9% you’re good to go. Banks can be a bitch with loan approval, but seriously at this point you’re very unlikely to have issues. . I’m going through the same thing at the moment. It’s for a 2nd place and it’s an absolute bitch.

friendlyginge

Politicker

0

Account Executive

Best of luck to you! It’s gonna be so worth it

JustGonnaSendIt

Politicker

5

Burn Towns, Get Money

Word to the wise about owning a home as a salesperson...

Base your operational budget (including house payment, taxes, insurance, utilities, etc...) on your base salary rather than your OTE to the extent possible for your situation.

With an inconsistent cash flow across the year you can hit some serious monthly cash flow issues if you're basing your housing budget on base + commission income.

This approach also makes it much easier to qualify for the loan you're seeking as it's much easier to demonstrate your base than commission over time, especially having changed jobs within the last year.

I say this as someone with direct experience doing this wrong before I knew better.

friendlyginge

Politicker

1

Account Executive

Thanks, good advice. I’m gonna have to cut a lot of spending, it’s going to be a shock

JustGonnaSendIt

Politicker

2

Burn Towns, Get Money

It is a major budgetary adjustment. Easier if you're single or DINK. But it's very worth it in the long-run as few other investments help grow wealth over a 10 year period more than real estate.

Houses hold a lot of unexpected expenses, particularly your first one.

Depending on size of home, locality, etc... Things like AC systems, water heaters, furnaces, that DIY plumbing job from the last guy, and other things that are basically not top of mind for you because you used to rent or live at home are suddenly all your problem.

And that's not even considering any city / HOA ordinances or bylaws that specify how your property should be maintained.

It becomes important to build some kind of emergency buffer that's about 3 - 6 months of living expenses so you don't have to go into CC debt, sell shit, or ruin an investment when the AC guy tells you the system is kaput and hands you a $10K estimate. Another argument in favor of under-buying house.

Home ownership is much like working in sales. It's exciting when you accept the offer, it's a white knuckle ride until you're ramped up, but in the end it's totally worth it.

friendlyginge

Politicker

0

Account Executive

luckily I am DINK and we only used my income to qualify so we are already living below our means. I love the analogy to sales, I joke that it’s my biggest deal to date. But im excited to jump in because we’ve been saving up for a long time to be able to build wealth in home ownership!

JustGonnaSendIt

Politicker

0

Burn Towns, Get Money

I'm excited for you! Enjoy the journey.

FamilyTruckster

Politicker

1

Exec Director, Major Accounts

Fantastic advice right here. I’ve lived it too. Learned the hard way.

LordBusiness

Politicker

4

Chief Revenue Officer

I think your biggest challenge is only the 7 months of history. Unless you are a 1099 seller, the approval process isn’t much different than non commissioned w2 employees. Good luck!

CaneWolf

Politicker

3

Call me what you want, just sign the damn contract

They might focus on your base as the "guaranteed income."

Diablo

Politicker

2

Sr. AE

Yet to be in your position but all the best buddy

friendlyginge

Politicker

0

Account Executive

Thanks dude you'll be there soon!

MLD

Good Citizen

2

SVP

Been there…..make sure you are going out to multiple lenders (or use a broker). Different lenders can have different thresholds as far as what they will approve.

goose

Politicker

2

Sales Executive

Buying a house at the top of the market?

friendlyginge

Politicker

2

Account Executive

I hear you! but I offered what I think the house is worth to me and my family. I live in Austin, and got a place outside of it where the market has cooled down a bit. Austin has always been well insulated from recessions and doesn’t show any signs of slowing down its growth

goose

Politicker

0

Sales Executive

Good luck.

FattySnacks

Politicker

2

Senior Account Executive

What market in Austin has cooled down? Because I’m in Round Rock and it definitely hasn’t here haha

friendlyginge

Politicker

1

Account Executive

Haha yeah I guess when I say it “cooled down”, I mean that houses in the area Im looking (older Leander area) are only going 12% over asking in four days instead of 50% over asking in 2 days 😂

FattySnacks

Politicker

1

Senior Account Executive

Ahaha yeah that would count as cooling for me. Buddy in pville bought his place a year ago for 330 and he could easily sell in 48 hours right now for 600. Wild down here

friendlyginge

Politicker

0

Account Executive

Wow that’s insane. This market makes no sense. I offered 8% over asking because it still fell in my budget. I just have no idea what the appraisal will come in at since other houses in the are selling for all over the place with no rhyme or reason!

Salesgooch

Old School Bravo

2

Senior SDR Intern

Bought last year in Austin. Owe 350. Sold for 570. Just leveraged into a ranch outside of Austin! Good luck. Focus on your base salary and budget! I have a simple budget sheet on a google sheet. Makes the world of difference when you put it in a sheet and is less stressful.

friendlyginge

Politicker

1

Account Executive

Congrats on your upgrade!! Definitely will need to put together a budget, I’ve been putting it off because I know it will require hard changes lol but it will be worth it. Thanks!

hh456

Celebrated Contributor

2

sales

I rent. But house is nice.

CuriousFox

WR Officer

0

🦊

Renter here too. I also thought you had to have 2 years of history for commissions to count? I dunno maybe I'm making shit up now. I wouldn't put it past me. 🤷‍♀️

hh456

Celebrated Contributor

1

sales

i have no interest in buying.

Matt

Politicker

1

Sales Executive

I bought a house 6 months ago and the lender took the average of my last 2 years in commissions + base when calculating my annual salary.

UrAssIsSaaS

Arsonist

2

SaaS Eater

First off congrats, awesome step for you and your fam!

I just went through this a little over a year ago and what you provided will be more than enough, especially if you were conservative with your annual income.

My finance and I are both in sales and just used our prior year W2s to base our annual income and that was plenty once we supplied the normals docs. You should be good to go!

friendlyginge

Politicker

1

Account Executive

Thank you! I was lucky in that I had a sweet SDR gig the past 2 years where my salary was pretty consistent and I was able to build great credit. I almost feel like the process has been too easy and something is going to go wrong last minute! But have to remember the banks want us to take their money. Anyway, congrats to you as well, y’all got in at a great time and I hope you saw some sweet appreciation in this crazy market!

Salesgooch

Old School Bravo

2

Senior SDR Intern

I am on my second mortgage as a salesperson. My first mortage was as an SDR and now my second as a Manager.

Don't focus on the commission/OTE. they are focused on the base salary. That is what both loan originators told me and did not ask for proof of OTE. First mortgage was for $400K and my base was 45K. Second mortage is 650 and base is 60K. Sorry for bad grammar it's late.

Sunbunny31

Politicker

1

Sr Sales Executive 🐰

They do like to check on previous salary if you've been in your current role/position for less than two years. I had to write a note about why my salary dipped a bit last year in order to explain why I wasn't earning as much as previous years (Covid) but was approved for the refi anyway. A conditional approval is a good sign. Good luck!

friendlyginge

Politicker

0

Account Executive

Thanks! Glad you got approved, that's all very reassuring.

Do.it.for.the.checks

Politicker

1

Account Executive

Usually W2s for the past year is usually sufficient to get the loan. It's proof of income

Do.it.for.the.checks

Politicker

1

Account Executive

Past 2*

youKNOW

Politicker

1

Sales Manager

Depending on the lender, paystubs and W-2s are usually fine. If your variable pay looks weird, they mask ask for a letter of explanation but beyond that, if you're DTI checks out you should be fine.
Lenders can get a little funky with the commish breakdown but usually things work out.

Swiss456

1

Business Development Lead

If at a job under 2 years they normally will only go off your base salary. Past that they will factor commission into the mix. As long as your debt:income ratio is in alignment with your base salary then you are good to go on this home. If not, they may require more of a down payment or a co-signer.

Allisce

Tycoon

1

Account Executive

bought last fall. I had to submits months of paystubs and year ends. I also had to write a letter providing color to my variable income, not sure if my mortgage broker was just overly cautious

friendlyginge

Politicker

0

Account Executive

This is what I was expecting but my loan officer hasn’t contacted me for any extra docs, says I’m conditionally approved, just waiting on the appraisal

Allisce

Tycoon

0

Account Executive

I would write up a letter now just in case laying out the landscape and why your numbers have differed, what you pipeline is. Always good to have

Allisce

Tycoon

0

Account Executive

Conditionally approved was easy, getting fully written was another beast

CareerSDR

Opinionated

1

Account Executive

I was a loan officer before I got into tech. PSA to anyone buying a home. DO NOT send them more information than they request. Had plenty of deals die because I asked for 2 years W-2's and I got more than that.

friendlyginge

Politicker

0

Account Executive

Super interesting! Now that I’ve been through it, I’d love to see how it works on the lender side, so it’s cool that you have that experience. Do you recommend this because it just created too much work for the lenders and they didn’t want to deal with it? Or more so that sending too much info might showcase more problems that they may not have seen otherwise

CareerSDR

Opinionated

0

Account Executive

The latter. What they don't know won't hurt you.

Blackwargreymon

Politicker

1

MDR

When I asked for my first loan I have them my base + required quota, and explained that it could be higher or lower but that should be my avarage. I had no issues.

QueenSoopers

Opinionated

0

Account Executive

So I’m currently going through the process of building + buying our first home (it’s a bitch) but the way that our lender works is that if you’ve been with your company for less than a year, they only count base. But once you hit that year mark they count OTE with or without the pay stubs. Depending on how long down the line you’ll actually be purchasing, from what my lender told me it’s pretty easy to update your income as long as it’s before the close date obviously.

AnchorPoint

Politicker

0

Business Coach

Congrats

Error32

Politicker

0

ISR

Massive action. . I just came through it. In the beginning of august I was in the highest performance mode of my life. Kicking ass left right and center. . Switched jobs and just felt so “out of it” - like I’d forgotten how to do this sales thing. Spent times 3-5x a day reminding myself I’m good at this stuff.

Clashingsoulsspell

Politicker

0

ISR

Massive action. . I just came through it. In the beginning of august I was in the highest performance mode of my life. Kicking ass left right and center. . Switched jobs and just felt so “out of it” - like I’d forgotten how to do this sales thing.

SaaStruthATX

Valued Contributor

0

Senior Enterprise Account Exec

Wait! The inventory is skyrocketing in Austin. A $500k house purchased in 2020, the payment was roughly $2500/month on a 20% down conventional. That same $500k house is now $3900/month with the same loan. People will start getting desperate and prices will drop. There is a standoff right now between buyers and sellers to see who will break first, but people will eventually have to move or sell...Just look at the inventory it does not lie..unlike realtors who will always say its a good time to buy.

jefe

Arsonist

0

🍁

It's all about that base..

Arzola

Valued Contributor

0

Business administration

I hope everything goes well for you

AnchorPoint

Politicker

0

Business Coach

congrats

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