By the end of this guide you will know how a Florida mortgage broker calculates commission income, which documents to assemble, and how to get a mortgage for commissioned sales professionals without taking a hard credit hit up front. Variable pay does not disqualify you. It just means underwriters need more proof and use more conservative math. Before you start, gather your last two years of tax returns and W-2s or 1099s, your most recent pay stubs, and a current year-to-date commission report.
Step 1: Confirm How Your Commission Income Will Be Classified
Underwriters generally treat you as a commissioned earner when commission makes up more than 25% of your total pay. That is the Fannie Mae and Freddie Mac threshold as of this writing, and crossing it typically triggers a two-year tax return requirement. Guidelines get updated, so confirm the current figure before you build a plan around it. For a broader look at how this works, see our guide to commission-based income mortgage approval.
Next, decide which bucket you fall into, because each one is documented differently:
- W-2 base plus commission: If commission is 25% or less of pay, it may be counted with a shorter history. Above that, expect the two-year review.
- 100% commission on a W-2: You are an employee, but every dollar is variable. Tax returns, W-2s, and year-to-date pay stubs all come into play.
- 1099 self-employed: You are treated as a self-employed borrower. Net income after business expenses (Schedule C) is what counts, not gross commission, and a year-to-date profit-and-loss statement is usually added.
Two misconceptions cause most of the surprises. First, a strong current month does not count on its own. Income must be shown as stable and likely to continue, which is why underwriters lean on history rather than your best recent stretch. Second, a big raise does not erase a short history. If you changed roles or industries recently, the two-year record may be judged differently, so raise it early.
One Florida advantage works in your favor from the start. Florida has no state income tax, so the same gross commission leaves more take-home pay here than in high-tax states. That does not change the gross number underwriters use, but it supports a healthier real-world budget once the housing payment is added, and it reinforces the debt-to-income (DTI) picture you will build in Step 4.
Step 2: Gather the Documents Underwriters Ask For
Assemble everything before you talk to anyone, because missing pages are the most common cause of delays. Your working checklist:
- Two years of federal tax returns, every schedule and page included
- Two years of W-2s or 1099s
- Pay stubs covering the most recent 30 days, showing year-to-date commission
- A signed year-to-date profit-and-loss statement if you are 1099
- Your commission plan letter or employment offer showing the pay structure
- Form 2106, or Schedule 1 or Schedule C, if you claimed unreimbursed business expenses
The expense forms deserve attention. Unreimbursed business expenses are costs of doing your job that your employer did not repay, such as mileage, client meals, or a home office. You may have deducted them to lower your tax bill, but underwriters can subtract them from your qualifying income. Better to know that now than to discover it at underwriting.
The plan letter matters most when you are changing jobs. If your new employer will pay a different commission structure, a written offer showing base, commission rate, and any draw gives underwriting something concrete to evaluate. Without it, a new role often gets little or no credit for commission.
A small habit that speeds review: name every file by year and document type, for example “2025-Tax-Return-Full.pdf,” “2024-W2-Acme.pdf,” or “YTD-Paystub-September-2026.pdf.” Reviewers who can find a page in seconds ask fewer follow-up questions, and fewer questions means a faster file. Our checklist of mortgage application documents covers how to organize and submit them.
Step 3: Calculate Your Qualifying Income the Way Underwriters Do
Underwriters convert variable pay into a monthly figure using a two-year average: total commission over 24 months divided by 24. Here is an illustration with made-up numbers. Suppose you earned $62,000 in commission in year one and $78,000 in year two.
- $62,000 + $78,000 = $140,000
- $140,000 / 24 months = $5,833 per month
If you only counted your best year, you would use $78,000 / 12 = $6,500 per month. That gap of about $667 a month is exactly the difference between the number you expect and the number you will be approved on.
When income is declining
Reverse the example: $78,000 in year one, then $62,000 in year two. Underwriters often use the lower, more recent figure, or a figure based on the declining trend, rather than the average. On $62,000 that is about $5,167 per month. If your income dipped, flag it before applying and be ready with a written explanation, such as a one-time market change.
Expenses and the year-to-date check
Now subtract unreimbursed expenses. If you deducted $6,000 per year, that is $12,000 across two years, so ($140,000 – $12,000) / 24 = about $5,333 per month, down from $5,833. Then comes the reality check: your year-to-date pay stub is compared to the average. If you are six months into the year with $28,000 in commission, you are pacing at $56,000 annually, below the average, and an underwriter may question it. If some of your income comes from 1099 work, our guide to self-employed mortgage approval requirements explains how net income is figured.
Test payment scenarios against these numbers with the CFPB mortgage calculator. Run it at the conservative income figure, not the optimistic one.
Step 4: Check Your DTI, Including Florida-Specific Housing Costs
Most conventional loans cap DTI, the share of gross monthly income going to debts including the new housing payment, at roughly 45% to 50%, depending on the automated approval findings. FHA and VA have their own limits and flexibility, so verify current guidelines on HUD.gov and VA.gov. With your Step 3 income, add principal, interest, taxes, insurance, and every monthly debt, then divide by qualifying income. For a full walkthrough of the math, read our guide to debt to income ratio for mortgage approval.
Florida adds line items that generic calculators miss:
- Homeowners insurance: Premiums in Florida can be far higher than the national norm, and they move with roof age, construction type, and location.
- Flood insurance: Required in many high-risk zones with a federally backed loan. Look up the property’s flood zone at the FEMA Map Service Center before you fall in love with a house, and get a flood quote early.
- Property taxes: Under Florida Statute 196.031, the homestead exemption can reduce assessed value by up to $50,000 for your primary residence. But the first year of ownership will not reflect it yet, since the exemption depends on your ownership and residency as of January 1 and on filing an application. Budget for a higher initial tax bill, and let your broker qualify you on that higher figure.
Here is where Florida helps. With no state income tax, your take-home on a given commission check is higher than it would be in many other states, which gives you more room in the actual monthly budget even though underwriters measure DTI on gross income. If a payment is close to your comfort limit, the missing state tax is a real cushion, particularly during slow commission months.
If your DTI runs too high, the fixes are usually paying down a revolving balance, choosing a lower-priced home, or shopping insurance, not waiting a year. Some buyers also work on improving their credit score for a mortgage to unlock better pricing.
Step 5: Choose the Loan Program That Fits Variable Income
Different programs treat commission differently, and the best fit depends on your history, credit, and cash. The table below is a general comparison as of 2026. Guidelines and overlays change, so treat it as a starting point rather than a promise of terms.
| Program | Income documentation | Typical minimum credit score | Down payment | How commission is treated |
|---|---|---|---|---|
| Conventional | Two years of tax returns and W-2s or 1099s when commission exceeds 25% of pay | Often 620 or higher | As low as 3% for some first-time buyer options | Two-year average; lower figure if declining |
| FHA | Two-year history, tax returns, pay stubs | Often 580 for 3.5% down; higher scores may be needed with some overlays | 3.5% with qualifying score | Two-year average; flexible on some ratios |
| VA | Two-year history preferred; tax returns and pay stubs | No VA minimum; overlays commonly 580 to 620 | Often 0% for eligible veterans | Averaged; residual income test also applies |
| Bank statement / non-QM | 12 to 24 months of bank statements instead of tax returns | Often 660 or higher | Often 10% to 20% | Deposits analyzed; usually a higher rate |
Bank statement loans can help when write-offs shrink your taxable income, but they usually cost more, so consider them when conventional, FHA, or VA will not work. If you are weighing that route, see these stated income mortgage alternatives for borrowers who cannot rely on tax returns.
Florida also offers down payment assistance (DPA), which is money that helps with your down payment and closing costs, through Florida Housing Finance Corporation. As of this writing, FL Assist provides $10,000 as a 0% deferred second mortgage, and FL HLP provides $10,000 at 3% amortizing over 15 years. Salute Our Soldiers is aimed at eligible veterans and service members. Confirm current terms, eligibility, and funding at floridahousing.org before you commit. You can also compare no down payment mortgage options in Florida alongside these programs.
The decision point is that DPA usually comes with a slightly higher first-mortgage rate. Weigh that premium against the cash you keep, which is what Step 6 does. Duane Buziak shops hundreds of lenders at one time as a broker, so the comparison for variable income does not depend on a single company’s guidelines.
Step 6: Run the Three-Variable Down Payment Assistance Breakeven
Three numbers decide whether DPA is worth it: the rate premium you pay on the first mortgage, the DPA amount, and how long you will own the home. Here is an illustration with made-up numbers, not a quote.
- DPA amount: $10,000
- Rate premium: 0.375% higher on a $350,000 loan, for example 6.375% instead of 6.000%
- Payment difference: about $85 more per month ($2,184 versus $2,098 in principal and interest)
Divide the DPA by the monthly cost: $10,000 / $85 is roughly 118 months, so the breakeven is about 10 years. Before that point the assistance saved you money. After it, the higher rate has cost you more than the assistance provided.
Amortizing programs like FL HLP add their own payment too. On $10,000 at 3% over 15 years, that is roughly $69 per month, and it counts toward your DTI, so include it in Step 4. Deferred programs like FL Assist add no monthly payment, but the balance comes due when you sell, refinance, or pay off the first mortgage. Homeowners who expect to refinance before selling should factor that payoff into the plan.
The decision rule is simple. If you may sell or refinance before the breakeven, DPA usually wins. If you plan to hold longer than roughly a decade, compare it against a lower-rate loan with no DPA, and see whether you can cover the cash to close another way.
Commission earners have a further reason to consider it. Income that swings by season makes cash reserves valuable, and DPA can keep money in your account for slow months rather than in the down payment. That cushion has value the breakeven math does not capture.
Step 7: Get Pre-Approved Without a Hard Credit Hit
Yes, you can start with a soft credit pull mortgage review through Duane Buziak. It uses NoTouch Credit Pull, which is a soft inquiry that lets your credit profile be reviewed without registering a hard inquiry, so there is no credit hit on your application. A standard pre-approval usually starts with a hard pull, which can lower your score slightly. This one does not, and it lets you compare options before committing. If speed matters, see how same day mortgage pre-approval works in Florida.
- Submit your documents. Send the files from Step 2, named by year and type.
- Get the income calculation. Your broker runs the two-year average, subtracts expenses, and checks year-to-date pay against it.
- Review your options. Compare programs, DPA choices, and payments at your conservative income figure.
- Authorize a hard pull only when you are ready to lock. Until then, a mortgage pre approval without hard pull keeps your score untouched.
Ask for a written income worksheet. Showing a listing agent a pre-approval backed by documented math is stronger than a one-line letter, and it protects you from bidding above what the numbers support.
If a program you are considering has income limits, look up your county on the HUD income limits dataset page and compare it with your qualifying income. Skip this if your program has no limits.
Credit scoring also matters. Vantage Score 4.0 is a newer credit scoring model, and it may be used in some situations alongside traditional models, so ask which score applies to your loan. Access is available 24/7, which helps when your calendar follows client deadlines instead of bank hours. Once you have options in hand, our guide to whether to lock your mortgage rate or wait can help you time the decision.
Before You Make an Offer: Recheck, Then Start Your Review
Recheck two things before any offer goes in: your income worksheet, to confirm it still matches your latest pay stub, and the property’s flood zone at msc.fema.gov, since both can move your payment. Then start a no credit hit mortgage application with Florida Mortgage Maestro by Duane Buziak.
Your dream home in Florida is closer than you think. Let’s turn your homeownership goals into reality with a personalized mortgage solution designed for your unique journey. Get your credit-safe consultation today and discover the loan options that fit your life, backed by trusted guidance every step of the way.