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Can I Get Approved For W2-Income Mortgage Without Tax Returns With Commission
Can I qualify for a no tax return W2 loan if commission is large part of my pay?
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1 Reply
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You can be approved for a W-2 income mortgage without paying tax returns. This is possible even if commissions are a big part of your pay. However, it depends on the particular lender and how they compute income.
Things to remember
W-2 Income Income that includes Commissions: As a rule of thumb, lenders normally want to see that you have received a steady income stream over two years. Mortgage lenders want to verify if the commissions make up most of your earnings. While they may not need your tax returns, these financial institutions will review your recent pay stubs and W-2 forms to affirm the consistency in earnings from the commission.
Lender prerequisites:
FHA Loans: If you can prove regularity in earning through your W-2s and pay stubs, then some FHA lenders might accept this arrangement, in which no tax return is given.
Conventional Loans: Some conventional lenders may provide loans based only on W2 forms, particularly when commissions are indicated there instead of being treated as self-employed revenue. Mortgage lenders could still insist upon additional paperwork, wanting more proof of stability linked to one’s commission-based income.
Non-QM Loans: Alternative financing and non-QM loans could be suitable for people with large amounts from commissions. Non-QM loans do not wish to use tax returns as their basis for the application. Typically, such loans have less stringent documentation requirements.
Income calculation:
The qualifying income is usually determined by finding an average over 24 months earned from selling houses or other jobs under a real estate sales agent license. If there are significant fluctuations within different periods during this two-year time frame, then one should expect lower averages than in recent times, hence lowering the mortgage amount qualified for.
Documentation: Your last two W2 forms, recent pay stubs, and a Verification Of Employment (VOE) from your employer may be required as evidence supporting the level of income you claim.
Next steps:
Mortgage Broker or Lender Consultation: W2-only loan programs are offered by some lenders. Therefore, talk with any mortgage broker so that they can guide you on how to apply for loans that suit your case best because only W-2 forms will be used.
Documentation Gathering:
Have all W2s and recent paystubs ready. Income documents need to show consistency in earnings over time. More documents indicating stability improve chances. A good lender who understands commission-based income is essential for a smooth approval process, even though there might not be tax returns when seeking a mortgage loan. This type of revenue forms a large portion of one’s salary.