We Help California Home Buyers become California Homeowners

Determining Income

How to calculate income:

• Monthly base or gross income has no adjustments.

• Overtime, bonus and commission income is to be averaged using the past two years compensation. The income must have been received for the past two years with the same employer.

• Self employed income (Schedule C, Corporation or Partnership) is to be averaged using the last two years compensation. Must have been self employed for at least two years in the same field. Use your past two years federal tax returns to determine average monthly income.

• Interest and dividend income is to be averaged. You must have been received this income for at least the last two years. Use your past two years federal tax returns to determine average monthly income.

• Alimony and child support income must continue for at least 5 years. Proof of receipt of income is required.

• Trust and note income must continue for at least 5 years. Income is to be averaged. Use your past two years federal tax returns to determine average monthly income.    

• Monthly Rental Income is determined by taking 75% of your gross monthly rent and subtracting monthly property taxes, home owner's insurance, mortgage insurance ( if applicable) and home owner's association dues ( if applicable).

• Automobile allowance is not to be used for income. This compensation may be used to offset automobile expenses. Contact our office for details.

Determining Long Term Debt

What is considered long term debt:

• Any credit card with a balance.

• Any Installment debt ( mortgage, car, student or other personal loans ) that will not be paid off in less than 12 months.

• Child support and alimony payments that will be in effect 12 months or longer.