Did you know that FHA requires a lender to use the most recent year overtime or bonus IF the overtime or bonus has decreased from the previous year by 20% or more? This can make a big difference if your lender does not know this fact and is averaging the income instead.
Related Article Title: FHA – Declining Overtime Income Calculation: What are the rules for averaging overtime income if that income shows a decline from the previous year? Answer: If the Overtime or Bonus Income from the current year decreases by 20 percent or more from the previous year, you must use the current year’s income. Reference: v. Overtime and […]