Niche Mortgage Guide · May 2026
Mortgage on Commission Income
By Ziya Y. · 23 Years Banking & Mortgage · Updated May 2026
📖 Real Scenario
David is a top pharmaceutical sales rep earning $180,000 last year — but only $95,000 the year before as he ramped up. His lender averages: ($180K + $95K) / 2 = $137,500. Not $180K. Worse: if next year he earns less than $137,500, some lenders would use the lower year only. David's lesson: document everything and time your application carefully.
🔑 Key Facts Banks Won't Tell You
- Commission income requires 2-year history — lenders average both years
- If income is declining year-over-year, lenders use the LOWER year only
- If income is increasing, lenders average the two years
- Base salary + commission: base always counts, commission needs 2-year history
- 100% commission roles are hardest — lenders may require larger reserves
Frequently Asked Questions
Q: How do lenders calculate commission income?
They take your last 2 years of commission income from W2s and tax returns, then average them. If year 1 was $80K and year 2 was $120K, qualifying income is $100K. If year 1 was $120K and year 2 was $80K (declining), most lenders use only $80K.
Q: What if I just started a commission job?
Less than 2 years of commission history is problematic. If you have a base salary component, that base counts immediately. The commission portion typically requires 2 years. Some lenders make exceptions for same-field switches (e.g., switching from one sales company to another).
Q: Can realtors and mortgage brokers get mortgages?
Yes, but it's complex since they're often self-employed with commission income. Expect to provide 2 years of tax returns, 1099s, and a year-to-date profit/loss statement. The self-employment rules apply — lenders use net income after business expenses, not gross commissions.
Q: What about bonuses?
Bonuses follow the same 2-year rule. If you've received bonuses consistently for 2+ years and your employer confirms they're likely to continue, they can be averaged and included. One-time bonuses typically don't count.
Not financial advice. Educational content based on 23 years of mortgage experience. Consult a licensed MLO for your specific situation.
The part almost nobody publishes free
Prices and rates are widely reported. Whether a lender says yes is not. In the complete 2025 federal record, denial rates across the 100 largest FHA lenders ran from 1.8% to 78.7% — same programme, same year.
And it is not simply who applies where: standardizing on state, loan amount, income, debt-to-income and loan-to-value, applicant mix explains only a 2.7× range in expected outcomes.
CFPB HMDA 2025, computed by FinanceRateCalc. Covers the highest-volume lenders published per market, not all lenders. Historical observations, not predictions. CC BY 4.0, not independently reproduced.
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