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Old 02-11-2013, 07:43 PM
 
Location: My House
34,799 posts, read 31,656,160 times
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To ask. For documentation, that is.

Our credit union wants us to provide a letter for bonus income (3-year history, steadily increasing bonuses) that states (according to the loan officer) that bonus income will continue in the future. Signed and dated.

How many HR depts for large corporations are going to sign off on a letter like that? It seems like it could be legally binding if the company one day decided to discontinue bonuses.

I've never heard of it put quite that way. I've only ever had to show bonus history. The proof of income (including bonus income) was verified via pay stubs, w-2s, and by phone or employment verification letter.

Any pros that can shed some light on this?

We're trying to figure out what sort of letter is going to suffice.
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Old 02-11-2013, 08:12 PM
 
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All they need is a letter from your company (or Verification form that the bank has already sent to them) that states that your position will continue to have a bonus component. They should not be asking for any numerical guarantee.

Typically, averaging the most recent two years for which taxes have been filed is the required method. The letter confirming future bonus-ability sounds like something done in the case of a new job or relocation, wherein guaranteed, regular bonus amounts can be quantified. But your history seems to preclude this need.

Not a huge deal, if the numbers work, and the letter is accepted without guarantee of any bonus amounts.
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Old 02-11-2013, 08:39 PM
 
Location: MID ATLANTIC
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Actually, the wording isn't "guaranteed to continue," but "likely to continue."

If they are using it as income, and you need it to be counted as income, in addition to a 2 year track record, there must be an expectation it will continue. Thus, the letter.

Yes, some of the largest corporations in the country have provided a Verification of Employment and checked "likely to continue" (which your credit union could do - send the form). Part of the problem in your situation is you are being asked to provide the letter.......when it really should be the lender/credit union calling the HR Dept and reassuring them that this letter will not pass thru your hands and is used only for the calculation of bonus income. Applying for a mortgage loan should never put you, the employee, in an unfavorable light with your employer. The lender should do the asking and follow up with your authorization to release information. The employer can add to the letter that this statement is not to be interpreted as a guarantee of furture payment. But if bonus income is a common occurance across company lines, they should have zero problems providing the letter.
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Old 02-11-2013, 10:01 PM
 
Location: My House
34,799 posts, read 31,656,160 times
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Thank you both!

This is starting to click for us now. The request wasn't clear, but with your help, we think we've connected the dots regarding this request.
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