Financing in San Francisco>Question Details

greensthooli…, Home Buyer in San Francisco, CA

How does an underwriter treat a gap in taxable income?

Asked by greensthooligan, San Francisco, CA Tue Dec 10, 2013

Last year our 2013 bonus payments were accelerated into 2012 (Dec 31) because of the fiscal cliff. We typically get bonuses early in the new year. So in essence my tax return will show higher 2012 income (two bonuses), low 2013 income (zero bonus), and then regular 2014 (1 bonus) income. Does this matter or would an underwriter look "through" the timing on this issue?

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They will likely ask for a letter of explanation to provide information as to why there is a gap. Other than that it shouldn't be too big of a deal. I suggest you speak with a lender like myself who would be glad to speak with you to help you get the loan that you need. If you have any further questions or if you would like a loan, feel free to contact me. Good Luck! Brian Nguyen Sr. Mortgage Banker NMLS # 659743 Phone: 949.667.2887
0 votes Thank Flag Link Mon Feb 3, 2014

As others have stated, I support that your explanation is excellent and would likely suffice. As a loan officer, I will usually try to qualify the borrower without bonus anyway, and if at all possible, because that would mostly take the issue off the table. Either way, you have a strong case here.

Rob Spinosa
Web Reference:
0 votes Thank Flag Link Tue Dec 17, 2013

This will not be an issue. You will most likely have to provide a written explanation, describing what has been written above.


Bryan Mecsey
Amerifirst Financial Inc.
NMLS: 861229
0 votes Thank Flag Link Tue Dec 10, 2013
It will not be an issue.

Alex Greer
Loan Officer
NMLS #1056079

0 votes Thank Flag Link Tue Dec 10, 2013

An explanation, like the one you just gave, along with the standard verification of employment/income (showing how/when the bonuses were disbursed in the past,would be sufficient with our underwriting department.

Let me if we can assist.


Thierry Abel
Senior Loan Consultant
By Referral Only
All California Mortgage
A Division of APMC
P: (415) 464-8261
C: (415) 378-7508
F: (415) 464-2367
NMLS 304353 - BRE 01380701
0 votes Thank Flag Link Tue Dec 10, 2013
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