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Gross Monthly Income
(Pre Tax Dollars)

First of all, the lender will analyze your pre-tax monthly income, including earnings, child support payments received, pensions, social security, permanent disability payments, etc.

Correct calculation of monthly income is key to determining how much house payment you can afford.

CALCULATING PRE-TAX INCOME

• If you are a Full-time, hourly employee, multiply your hourly rate by 173.33 to obtain your monthly income.
• Salaried employees can calculate their monthly base income by multiplying the salary portion of their gross wages by 4.3 if paid weekly, by 2.17 if paid every two weeks, or by 2 if paid twice monthly.
• Hourly or salaried employees can include bonuses and commissions in the monthly income calculation as long as their receipt for the past two years can be documented, and it can be reasonably assumed that their payment will continue into the future.
• Part time and seasonal income can also be used in the calculation of monthly income, but a prior two year payment history must be proven.
• Social Security and pension income is usually assumed to be permanent if the applicant is 62 years of age or older. Otherwise proof of continued receipt of these payments and of disability payments will probably be required. Proof of continued receipt of child support will probably be required for the next three years.