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.
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.