Borrowers relying on overtime or bonus income for qualifying purposes must have a history of no less than 12 months to be considered stable. Obtain the following documents: the borrower's recent paystub and IRS W-2 forms covering the most recent two-year period.

How Often Paid

How to Determine Monthly Income

Annually

Annual gross pay / 12 months

Monthly

Use monthly gross payment amount

Twice Monthly

Twice monthly gross pay x 2 pay periods

Biweekly

(Biweekly gross pay x 26 pay periods) / 12 months

Weekly

(Weekly gross pay x 52 pay periods) / 12 months

Hourly

(Hourly gross pay x average # of hours worked per week x 52 weeks) / 12 months

answer the questions and show your math for each!!!

1)Jennifer earns $32,000 a year on a job she began six months ago. Just recently, she began receiving overtime pay of $500.00 a month and her boss said it would continue for the next year. What monthly income would you use to qualify this applicant for a loan?

2)Mark earns $15.35 an hour working at the local grocery store as a cashier. He averages about 28 hours per week this past year and has been working at the store for three years. He also works part time as a bartender at a local pub. He is has worked there for just over two years and earns approximately $300.00 twice monthly. He also stated that he earns $250 in tips each month but it does not show up on his paystub. What monthly income would you use to qualify this applicant for a loan?

3)Maria is a mortgage loan officer. She earns $24,000 a year plus commission. She started eight months ago and has earned $35,000 in commission year to date. What monthly income would you use to qualify this applicant for a loan?

4)Joe works as a carpenter and has been employed by the same company for the past 5 years. During the winter months he collects unemployment income. Last year he earned $45,500 in income from his employer and $18,000 in unemployment income. What monthly income would you use to qualify this applicant for a loan?

5)Sara recently opened up her own business. She used to work for a retail chain grooming pets. She now has her own pet grooming business that she operates out of a vehicle. It has been very successful in its initial three months. She earned $30,000 a year when employed by the retail chain. She told the loan officer she is grossing $3,500 a month since opening her new operation. What monthly income would you use to qualify this applicant for a loan?