If you’ve ever wondered why your pay stub format or income type changes what a lender asks for,  you’re not alone. In today’s clip, we break down the most common types of income and exactly what lenders will want to see when you’re getting ready to buy a home.

Here’s what you need to know to stay prepared, save time, and avoid surprises.

The Big Picture: Why Income Type Matters

When you apply for a mortgage, lenders are trying to answer one question:

“Can this person afford the loan now and over time?”

How you make money plays a big role in that and it changes the documents lenders need from you.

Let’s break it down.

1. Full-Time (Salaried / W-2)

What this looks like:
Steady job, regular hours, annual salary or hourly wage with consistent paystubs.

What lenders usually ask for:

  • Recent pay stubs (typically last 2–3 months)
  • W-2s from the past 2 years
  • Proof of employment (sometimes verbal verification)

Why this matters:
Full-time income is predictable lenders can usually count on it continuing unless there’s a big life change.

2. Part-Time / Variable Hours

What this looks like:
You work variable shifts each week, or you’ve supplemented a full-time job with part-time gigs.

What lenders usually ask for:

  • Pay stubs from all employers
  • W-2s covering the last 2 years
  • Sometimes a letter explaining hours or recent work changes

Why this matters:
If your hours change week to week, lenders want to see that income is stable over time and not just seasonal or sporadic.

3. Self-Employed / Commission / Contract

What this looks like:
You don’t receive a regular paycheck, maybe you invoice clients, earn commission, or run your own business.

What lenders usually ask for:

  • Personal or business tax returns (commonly 2 years)
  • Profit & Loss statements
  • Additional business documents (if applicable)

Why this matters:
Income isn’t predictable in the same way a salary is, so lenders want to see longer-term performance and trends, not just one good month.

4. Variable / Mixed Income

Some of us fall into more than one category, for example:

  • Part-time work plus gig income
  • Full-time job plus side business
  • Commission plus base salary

In these cases, lenders will often want all income streams documented and may average earnings over 1–2 years.

How to Stay Ready Before You Apply

Here’s a quick checklist to help you be prepared:

Must-have documentation:

  • Recent pay stubs
  • W-2s (past 2 years)
  • Tax returns (for self-employment or variable income)
  • Profit & Loss statements (if applicable)
  • Any business licenses or corporate docs

Pro tips:

  • Organize digital copies in one folder
  • Talk to a lender before shopping for houses
  • If your income changed recently, be ready to explain it

Being proactive will save you stress (and extra requests later).

Final Thought

Income isn’t just a number it tells a story about stability, reliability, and trends over time. Whether you’re salaried, self-employed, or juggling variable income, understanding what lenders will ask for puts you in control of your home-buying process.

One thing I always like to make clients aware of is that not all preapprovals are created equal.

  • In many cases, a preapproval is based largely on the income number a borrower provides, without collecting all of the documentation needed to truly qualify that income upfront.
  • While this can feel quicker at the beginning, it often leads to confusion or surprises later in the process.

That’s not how I like to work.

  • I believe setting clients up for success starts with clarity.
  • That’s why I take the time to review and understand income early in the process.
  • Knowing your exact parameters from the start allows you to move forward with confidence and a much clearer picture of what’s realistically possible.

If you want help figuring out exactly what paperwork you’ll need based on your specific income situation, I’d be glad to walk you through that next steps!

Lynn Marie Oates
Mortgage Loan Officer NMLS #1495433
(248) 875-1029
lynnoates@goforwardmortgage.com

I know firsthand how overwhelming securing a mortgage can feel — and that’s exactly why I’m here. With my experience and a heart for helping people, my goal is to guide you through every step with clarity, patience, and care.

I take a personalized, relationship-first approach, offering full support and clear communication so you never feel rushed or unsure. I take the time to understand your goals, explain your options, and help you put your strongest offer forward when it matters most.

Helping people feel confident, prepared, and excited about homeownership isn’t just part of my job — it’s what I truly love to do!

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