Mortgage Glossary

Gross Income

IGross annual income is the total income that you are paid by a company before any deductions are subtracted. Divide by 12 for gross monthly income.

For employment verification your mortgage broker will usually request that you obtain an employment letter from your payroll department confirming your information. A few lenders will allow you to prove income by showing two years of income tax returns and some current pay stubs.

The letter should be on company letterhead and include:
Your current gross or base income
The date your employment started with that company
Your current position or job title
Your status - full-time (no extra info needed), contract, regular part-time, or casual.

If you are on contract, then the letter must also state:

the details of your contract (a copy may be required).

If you are paid regular part-time or casual, then the letter must also state:

The dollars per hour that you are paid,
The number of hours per pay period that you work,
That the number of hours per pay period (or annually if seasonal) are consistent.
OR

provide two years of tax returns
confirmation of gross income year-to-date.
If you received a bonus last year, then you can only use that bonus if you can show that you have received a similar amount for the past few years. Overtime income is treated the same way.

There are other types of income that can be used:

pension income,
social security income,
investment income,
dividend income,
income from annuities,
child tax credits,
child support income,
alimony income,
rental income (including illegal suites in some cases!).
any income of a continual nature can be included.

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