Section outline

  • SESSION 1: FIXED INCOME

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    • 🗓️ Recorded: 1/15/2026
      ⏱️ Est. Time: 60 mins
       
      🚩 Report Recording

      Session Overview

      This presentation focuses on the comprehensive evaluation and calculation of borrower fixed income for mortgage qualifying purposes. It details risk assessment strategies, documentation standards, and precise calculation methods for various steady income sources.

      Key Topics

      • Risk Assessment Framework Lenders evaluate income based on three criteria: History (2 years of employment), Consistency (stable earnings), and Continuance (likelihood to last at least 3 years).
      • Income Definitions Fixed (non-variable) income is characterized as stable, predictable, and occurring with regular frequency, such as base salary or social security.
      • Standard Documentation Requirements typically include a paystub dated within 30 days of application and W-2s for the prior two years, or a full Verification of Employment (VOE).
      • Calculation Logic Standardizing monthly income requires different formulas based on pay frequency, such as multiplying biweekly pay by 26 or weekly pay by 52 before dividing by 12.
      • Non-Taxable Income Specific types of income, such as child support or Social Security, may be "grossed up" by 25% to account for their tax-exempt status.
    • Session 1 - Related Documents File

      Presentation handout
      Printable income calculation worksheet (not editable)
      Get access to our Employment and Other Income Calculator
      Income Worksheet

    • Quiz - Session 1
      Students must
      Receive a grade
      Receive a passing grade

  • SESSION 2: VARIABLE INCOME

    • 🗓️ Recorded: 1/21/2026
      ⏱️ Est. Time: 60 mins

      Session Overview

      This presentation focuses on the specialized skills required for evaluating and calculating variable income for mortgage borrowers, specifically focusing on fluctuating earnings that are not predetermined or regular.

      Key Topics

      • Variable Income Defined Earnings that fluctuate, are not predetermined, and do not occur with regular frequency, such as overtime, bonuses, commissions, and part-time pay.
      • History and Stability Rules A 24-month history is recommended (minimum 12 months), and additional analysis is required if income fluctuates more than 10% year-over-year.
      • Trend-Based Calculations Qualifying income is determined by trends: stable or increasing income is averaged, while declining but stabilized income requires using the lower current amount.
      • Risk Assessment (The 4 Cs) Variable income analysis must be balanced against the borrower’s overall credit, capital, and collateral to assess total loan file risk.
      • Specialized Scenarios The presentation details specific protocols for 1099 independent contractors, tip income, trust income, and borrowers with recent job changes.
    • Quiz - Session 2
      Students must
      Receive a grade
      Receive a passing grade

  • Magic Minutes training series

    • Efficiently assess whether a borrower will be able to make a new mortgage payment AND meet their other monthly obligations. Watch this training series on evaluating and calculating borrowers’ income, broken down into 6 individual modules that each focus on a specific type of income.

      ▶️ Explore the series