Mortgage application: Investment banking bonus recognized as income?

It is a source of income, but it is not your salary, so I'm guessing they will treat it as something less stable than salary. They may give it more weight than a bonus received by a non-IB because it is widely known that bonuses make-up most of IB's total compensation, but as with all "bonuses" it is not guaranteed. I am not an IB, so that is just my guess. Good luck.

how much was the bonus?

bonus was not considered when i applied for a mortgage.

IB bonus can easily be several times the base salary

#4, can I ask whether you got the loan you applied for?
I am curious b/c I am in IB, and I know even for upper level employees on the business side base salaries rarely exceed $150k. That alone is barely enough income for a $500-600k mortgage.

My bonus counted towards my income: Average of two years. My husband is in sales, and they used a three year average of his commissions.

They'll usually look at your last 2-3 year bonuses and average them, then consider that amount as income. Get a good mortgage broker who is used to dealing with this. There are a couple of very good ones; Park Avenue Mortgage is one. (No, I'm not affiliated with them.)

check out Home Financial Services (www.ezhomemoney.com) - awesome no hassle company! I am only affiliated with them after I took out a mortgage with them. Fast, friendly, highly competitive rates, upfront, and honest!

OP, if you are at a big name bank, check in your company, there should be a preferred list of lenders somewhere with your company. They "know" all about your bonuses and may give you break on closing costs. You will probably need to show paycheck stubs. gluck.

bonus baby here -- last I was told, look at last two years. If your bonus went up, they assume average of two going forward. If your bonus went down, it's the last year's bonus (i.e. the lower) that they assume going forward. Add whichever number this is to your base.

Also expect higher expectations of cash in reserve to projected req'd monthly expenses than if you weren't in a bonus business, for any given size loan.

I was told to consider Interest Only (IO 10/1 or fixed) Loans so as to keep cash flow low during the year and then drop down a big principal payment after you get your bonus, gluck.

That last bit is probably good advice. Paying down a mortgage with much of your bonus keeps it from burning a hole in your pocket and cuts cash burn (interest) in future years.

I am in a salary poor household. 80% of our household income is bonus and commissions. We had no problem counting our total income (3 year average) towards a mortgage and chose to do I/O to allow us smaller payments if and when we do have a bad year.

Anyone who lives off bonus etc knows all about budgeting for the hard times ahead. The IO is a no brainer.