This calculator helps estimate your potential qualifying income according to general Fannie Mae guidelines. Lenders use these calculations to determine how much mortgage you can afford. Please note that this is an estimate; actual lender calculations may vary based on specific documentation and underwriting rules.
Enter your consistent gross monthly salary.
Enter your hourly pay rate.
Enter your typical hours worked per week.
Average your overtime income over the last 12-24 months.
Average your bonus income over the last 12-24 months.
Average your commission income over the last 12-24 months.
Based on net profit from tax returns, averaged over 1-2 years.
Total rent collected from investment properties.
Total monthly expenses for investment properties (PITI, HOA, etc.).
e.g., pension, Social Security, alimony, child support (must be consistent and documented).
Estimated Qualifying Income:
Understanding Fannie Mae Income Guidelines
Fannie Mae (Federal National Mortgage Association) sets guidelines that lenders follow when underwriting mortgages. A crucial part of this process is determining a borrower's stable and reliable qualifying income. This income is used to calculate debt-to-income (DTI) ratios, which are key factors in mortgage approval.
Key Income Types and Considerations:
Base Salary/Hourly Wages: This is typically the most straightforward income to qualify. For hourly employees, lenders usually calculate monthly income based on a standard work week (e.g., 40 hours) and may require verification of consistent employment.
Overtime, Bonus, Commission: These variable income sources are generally acceptable if they have been consistent and are likely to continue. Lenders often require a 12-24 month history of receiving this income and will average it over that period. For example, if you received $2,400 in bonuses over the last 24 months, your qualifying monthly bonus income might be $100 ($2,400 / 24).
Self-Employment Income: This is often the most complex to qualify. Lenders typically require two years of personal and business tax returns (e.g., Schedule C, K-1s, Form 1120S). The qualifying income is usually based on the net profit from the business, averaged over the two-year period, after certain add-backs (like depreciation) and deductions.
Rental Income: Income from investment properties can be included. Lenders usually calculate net rental income by taking the gross rent and subtracting documented expenses (PITI, HOA, etc.). Sometimes, a percentage of gross rent (e.g., 75%) is used if expenses are not fully documented.
Other Consistent Income: Sources like Social Security, pension, disability, alimony, and child support can be included if they are consistent, documented, and expected to continue for at least three years. For non-taxable income (like some Social Security or child support), lenders may "gross up" the income by a certain percentage (e.g., 25%) to account for its tax-exempt status.
Important Notes:
Consistency is Key: Fannie Mae emphasizes the stability and likelihood of continuance for all income sources. Sporadic or unpredictable income may not be fully counted.
Documentation: Be prepared to provide extensive documentation, including pay stubs, W-2s, tax returns, bank statements, and employment verification.
Not a Guarantee: This calculator provides an estimate based on common guidelines. Your actual qualifying income will be determined by your lender during the underwriting process, which involves a detailed review of your financial situation and documentation.
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function calculateFNMAIncome() {
var baseSalary = parseFloat(document.getElementById('baseSalary').value) || 0;
var hourlyWage = parseFloat(document.getElementById('hourlyWage').value) || 0;
var hoursPerWeek = parseFloat(document.getElementById('hoursPerWeek').value) || 0;
var avgMonthlyOvertime = parseFloat(document.getElementById('avgMonthlyOvertime').value) || 0;
var avgMonthlyBonus = parseFloat(document.getElementById('avgMonthlyBonus').value) || 0;
var avgMonthlyCommission = parseFloat(document.getElementById('avgMonthlyCommission').value) || 0;
var avgMonthlySelfEmployment = parseFloat(document.getElementById('avgMonthlySelfEmployment').value) || 0;
var grossMonthlyRentalIncome = parseFloat(document.getElementById('grossMonthlyRentalIncome').value) || 0;
var monthlyRentalExpenses = parseFloat(document.getElementById('monthlyRentalExpenses').value) || 0;
var otherConsistentMonthlyIncome = parseFloat(document.getElementById('otherConsistentMonthlyIncome').value) || 0;
var totalQualifyingIncome = 0;
// Base Income Calculation
var calculatedBaseIncome = 0;
if (baseSalary > 0) {
calculatedBaseIncome = baseSalary;
} else if (hourlyWage > 0 && hoursPerWeek > 0) {
// Approximate 4.33 weeks per month for hourly income
calculatedBaseIncome = hourlyWage * hoursPerWeek * 4.33;
}
totalQualifyingIncome += calculatedBaseIncome;
// Variable Income (Overtime, Bonus, Commission)
totalQualifyingIncome += avgMonthlyOvertime;
totalQualifyingIncome += avgMonthlyBonus;
totalQualifyingIncome += avgMonthlyCommission;
// Self-Employment Income
totalQualifyingIncome += avgMonthlySelfEmployment;
// Rental Income (Net)
var netRentalIncome = grossMonthlyRentalIncome – monthlyRentalExpenses;
// Fannie Mae often uses 75% of gross rent if expenses aren't fully documented,
// but for this calculator, we'll use the provided net.
// If net is negative, it might be treated as a liability or not counted.
// For simplicity, we'll only add positive net rental income.
if (netRentalIncome > 0) {
totalQualifyingIncome += netRentalIncome;
}
// Other Consistent Income
totalQualifyingIncome += otherConsistentMonthlyIncome;
if (isNaN(totalQualifyingIncome)) {
document.getElementById('result').innerHTML = "Please enter valid numbers for all fields.";
} else {
document.getElementById('result').innerHTML = "$" + totalQualifyingIncome.toFixed(2);
}
}