Why History Matters
Consider:
- Employee A has received overtime every pay period for three years.
- Employee B worked unexpected overtime for three weeks because coworkers were out.
Those are not equally predictable income sources.
Base Income vs. Extra Income
Fannie Mae's current guidance distinguishes fixed base income from variable earnings such as overtime and bonus income, and requires lenders to evaluate stability and continuation.
Why Consistency Matters
Someone who earns overtime every week for several years has a different income history than someone who received overtime only during one unusually busy quarter.
The lender is looking for a pattern it can reasonably expect to continue.
Bonus Income
A recurring annual performance bonus may be usable when there is sufficient history and likelihood of continuation.
A one-time signing bonus may be treated differently.
What If Income Is Increasing?
Increasing variable income can be positive.
The lender may still average it according to program rules.
What If It's Declining?
Declining bonus or overtime income can create concerns about sustainability.
An Example of the Math
Illustration only
Base salary
$60,000
Average qualifying overtime / bonus
$15,000
Illustration only: with verified history, potential qualifying income may be higher than base salary alone if underwriting supports the variable income.
Don't Spend the Bonus Before the Lender Counts It
If your entire home budget depends on bonus income, have the lender determine how much can actually be used before house shopping.
Real-Life Affordability
Even when a lender counts overtime, ask yourself: Do I want a mortgage that requires me to work overtime forever? Qualification and comfortable affordability are different questions.
How Lisa Helps
Lisa is a Nevada REALTOR®, not a lender. Whether overtime and bonus income counts, and how it is averaged, is a lender decision under current program rules.
With the lender's approved payment in hand, Lisa builds the Las Vegas home search around it and helps compare the true monthly cost differences between properties.
