Commission Income Mortgages
Commission income mortgages cater to individuals whose primary source of income comes from commissions. These mortgages recognize the unique nature of commission-based earnings, which can fluctuate significantly from year to year. Here's an expanded explanation, along with a list of typical documents needed:
Commission income mortgages are designed for individuals whose income is primarily based on commissions. Lenders assess commission income differently from regular salary income, as it can vary widely from year to year. To qualify for a mortgage, lenders typically look for a stable commission income history and may require additional documentation to verify income.
Typical Documents Required:
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2 most recent years' T4: T4 slips provide a summary of your earnings and deductions for each year. Lenders use these documents to verify your income and assess your ability to repay the mortgage.
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Recent pay stub: A recent pay stub shows your year-to-date earnings and helps lenders verify that your income is consistent with the information provided on your T4 slips.
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Letter of Employment: A letter of employment confirms your current employment status, including your position, length of employment, and income details. This document provides lenders with additional information about your employment history and stability.
When you are 100% commission-based, mortgage lenders typically look at a 2-year average of your income across these documents to qualify you for a mortgage. If your most recent year's income is lower than the previous year, lenders may use only the amount from the lower year's T4 slip to qualify you.
Additional documents may be required depending on your specific employment situation and the lender's requirements. These may include bank statements, commission statements, and proof of any additional sources of income.
As a mortgage broker experienced in dealing with commission-based income, I can help you navigate the mortgage process and find a solution that suits your financial situation.