Income & Employment
Can Commission Income Be Used to Qualify for a Mortgage?
How commission income is averaged, how much history lenders want, what happens when commissions decline, and how base plus commission is combined.
Updated 2026-08-21| Applies to: Sales professionals, real estate agents, recruiters and anyone paid partly on commission.
The short answer
Yes. Commission income is generally usable with a documented history, commonly around two years, and it is normally averaged rather than annualized from a recent strong period. Base salary plus commission can be combined, with the base recognized currently and the commission portion averaged. A declining trend usually means the lower recent figure or exclusion.
How the average is built
- 1.Collect W2s and year to date paystubs showing commission separately, or a verification of employment that breaks it out
- 2.Total the commission over the history period
- 3.Divide by the number of months in that period
- 4.Compare the current year pace against prior years and use the more conservative figure if the trend is down
Base plus commission
| Component | Treatment |
|---|---|
| Base salary | Current annual base divided by twelve |
| Commission | Averaged over the documented history |
| New commission plan at same employer | May need history before the variable portion counts |
| Commission at a brand new employer | Hardest case; often needs a longer history in the same line of work |
Shorter histories
Less than two years is sometimes workable when you moved within the same industry, the pay structure is similar, and the documentation is strong. It depends on the program and the automated findings, so it should be reviewed rather than assumed.
Unreimbursed expenses
On some files, business expenses tied to commission earnings are considered and can reduce the usable figure. This varies with how the income is reported and with the applicable program.
Commission earners get shortchanged when someone averages carelessly. Send me two years of W2s and your current paystubs and I will build the calculation properly.
Educational purposes only. Income eligibility and calculation methods vary by loan program, borrower circumstances, documentation, lender guidelines and underwriting requirements. Not all income may be eligible or calculated at its full amount. All financing is subject to application, verification, applicable program guidelines and underwriting approval. Not a commitment to lend. Manny Oloyede | Mortgage Broker | NMLS 1824463 | Ultimate Mortgage Brokers LLC. Equal Housing Opportunity.
Common mistakes to avoid
- Estimating affordability off your best year
- Switching employers mid process when your pay is commission based
- Not providing year to date detail that separates base from commission
Frequently Asked Questions
People also ask
How long do I need to be a contractor?
Two years is the common expectation. Some programs allow one year when the prior work was in the same field.
Read: Getting a Mortgage With 1099 IncomeCan I close on a mortgage before starting a new job?
Sometimes. Certain programs allow closing with an offer letter and a start date shortly after closing, with conditions. It depends on the program, the pay structure and the lender.
Read: Changing Jobs During the Mortgage ProcessHow much history do I need for bonus income?
Most programs look for about a two year history, though some allow shorter periods with strong documentation. Requirements vary.
Read: Do Bonus, Overtime and Commission Income Count?Do I have to explain why I was not working?
You will be asked for a brief written explanation. It can be short and factual; detailed personal or medical records are not typically required.
Read: Employment Gaps and Mortgage ApprovalDo I need two years at the same job?
Not always. Many programs look for a two year history in the same line of work rather than the same employer, and some situations allow less.
Read: How Mortgage Lenders Calculate Your IncomeCan I get a mortgage if I am retired?
Yes. Documented, continuing retirement income qualifies the same as employment income.
Read: Using Retirement, Social Security and Disability IncomeTerms used in this guide
- Commission Income
- Earnings tied to sales production, generally averaged over a documented history and reduced or excluded if the trend is declining.
- Variable Income
- Pay that changes period to period, such as overtime, bonus, commission, tips or variable hours. It is usually averaged over a history period.
- Qualifying Income
- The monthly income figure an underwriter can actually use after documentation, calculation and continuance rules are applied. It is often different from what you earn.
- Verification of Employment
- A lender's confirmation of your employment, typically written early in the process and verbally again shortly before closing.
Written by
Manny Oloyede, Mortgage Broker
NMLS #1824463 | Ultimate Mortgage Brokers LLC NMLS #2619461 | Licensed in OH | KY | NC | PA | SC | TN | TX
I have worked in mortgage lending since 2018 out of the Akron / Cuyahoga Falls Branch, helping buyers, homeowners and investors across Northeast Ohio and every state where I am licensed. These guides reflect the questions I answer most often, written the way I would explain them on a call.
Keep reading
How Lenders Calculate Variable and Fluctuating Income
Why overtime, bonus, tips, shift differential and seasonal pay are averaged, how long you need the history, and what happens when the trend declines.
Income & EmploymentDo Bonus, Overtime and Commission Income Count?
How lenders average variable income, how much history they want, and what to do when your bonus or overtime is trending down.
Income & EmploymentHow Do Mortgage Lenders Calculate Income?
The math behind qualifying income: how salary, hourly, variable and self employed earnings are converted into the monthly figure underwriting actually uses.
Self Employed BorrowersGetting a Mortgage With 1099 Income
How lenders treat 1099 contractor income, when a 1099 only program makes sense, and what documentation strengthens your file.
Questions about your own numbers?
Send over your goal, income type and timeline and you'll get a straight answer on what is realistic.