Real Estate

Including bonus compensation when qualifying for a mortgage

  • Last Updated:
  • Jul 30th, 2020 3:40 pm
[OP]
Newbie
May 21, 2020
4 posts

Including bonus compensation when qualifying for a mortgage

I get paid 15-20% bonus on top of my base income. How can I qualify for a mortgage requiring that bonus money to be counted?

The tricky part - I physically worked in the US for over half of 2018 (for the same Canadian company) so my Canadian notice of assessment does not include all of my 2018 income. 2019 assessment shows my full amount though.

Is there no other way to use my actual compensation? I have my IRS return showing my full 2018 income. I have a letter of employment specifically stating by base salary "and other special bonuses which conservatively amount to an approximate 15-20% of additional, variable compensation on an annual basis".

Note - I'm trying to qualify without my wife because she's new to Canada and including her complicates the application even more.
Last edited by MatthewR20087 on Jul 31st, 2020 1:05 pm, edited 1 time in total.
8 replies
Deal Expert
Feb 29, 2008
19086 posts
17424 upvotes
Tarrana & The Ri…
They can be counted in the calculations but you have to show a history.
Deal Fanatic
Jul 3, 2011
6517 posts
3788 upvotes
Thornhill
You're supposed to report your worldwide income on your Canadian tax return, weren't you? That would have made it much easier for a lender to include same given it's the same firm. Ask a lender and if they can include an amended return - might fix the probelm - it will certrtainly fix any CRA non-reporting of income problem.
MatthewR20087 wrote: I get paid 15-20% bonus on top of my base income. How can I qualify for a mortgage requiring that bonus money to be counted?

The tricky part - I physically worked in the US for over half of 2018 (for the same Canadian company) so my Canadian notice of assessment does not include all of my 2018 income. 2019 assessment shows my full amount though.

Is there no other way to use my actual compensation? I have my IRS return showing my full 2018 income. I have a letter of employment specifically stating by base salary "and other special bonuses which conservatively amount to an approximate 15-20% of additional, variable compensation on an annual basis".

Note - I'm trying to qualify without my wife because she's new to Canada and including her complicates the application even more. We can so easily afford this stupid mortgage but apparently you're not allowed to live outside Canada any time within the last 2 years of applying for one I guess.
[OP]
Newbie
May 21, 2020
4 posts
licenced wrote: You're supposed to report your worldwide income on your Canadian tax return, weren't you?
I over-simplified my original post. I moved to the US in 2016 and joined the US payroll and everything. In 2018 we changed our mind about staying and came back around October.

So my return is correct. I was primarily a US resident in 2018 and my Canadian return is filed as “immigrant” or whatever. And then I use the Canadian tax as a credit on my US return where my worldwide income is reported.
Deal Fanatic
Jul 3, 2011
6517 posts
3788 upvotes
Thornhill
Well then I guess the only way to know is to ask a lender if they would count your non-residency income toward their required years of income.
MatthewR20087 wrote: I over-simplified my original post. I moved to the US in 2016 and joined the US payroll and everything. In 2018 we changed our mind about staying and came back around October.

So my return is correct. I was primarily a US resident in 2018 and my Canadian return is filed as “immigrant” or whatever. And then I use the Canadian tax as a credit on my US return where my worldwide income is reported.
Deal Addict
User avatar
Jul 4, 2006
4237 posts
1012 upvotes
licenced wrote: Well then I guess the only way to know is to ask a lender if they would count your non-residency income toward their required years of income.
This.

But your situation seems reasonable especially if you are willing to provide your US returns.
Raptors tickets for sale
RFD Member since 2006
PM with game that you're interested in
Section 114 | Row 17 | 2 Seats
Member
Nov 24, 2019
436 posts
520 upvotes
Saskatoon
Depending on what lenders accept for your 2018 return then it really shouldn't be an issue. About 40% of my annual earnings is overtime and bonuses over my hourly pay. When I was applying for mortgages a few months ago I just need to show 2 years of my T4 and had no issues whatsoever.
Member
Jun 6, 2014
300 posts
129 upvotes
Toronto, ON
I think it would be easier to ask the bank where you're thinking of getting your mortgage. They would know best.
Deal Guru
User avatar
Feb 2, 2014
10289 posts
2995 upvotes
Toronto
MatthewR20087 wrote: I get paid 15-20% bonus on top of my base income. How can I qualify for a mortgage requiring that bonus money to be counted?

The tricky part - I physically worked in the US for over half of 2018 (for the same Canadian company) so my Canadian notice of assessment does not include all of my 2018 income. 2019 assessment shows my full amount though.

Is there no other way to use my actual compensation? I have my IRS return showing my full 2018 income. I have a letter of employment specifically stating by base salary "and other special bonuses which conservatively amount to an approximate 15-20% of additional, variable compensation on an annual basis".

Note - I'm trying to qualify without my wife because she's new to Canada and including her complicates the application even more. We can so easily afford this stupid mortgage but apparently you're not allowed to live outside Canada any time within the last 2 years of applying for one I guess.
We can try averaging T4s and W2s to qualify if it's with the same employer.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative

Top