Wage Income:

 

The Wage Income tab provides in-depth financial information for each of your borrower’s employers.

 

The Description section displays Employer and Employee information, the borrower’s Pay Period, Pay Frequency, and the number of months YTD based on the most recent Pay Stub submitted.

 

 

Paystub wages are automatically assigned to Borrower 1 or Borrower 2 based on borrower name matching. If a Paystub name does not match a borrower, the Paystub will be transferred to “Other.” Select the appropriate borrower via the Employee dropdown to manually assign the income to a borrower.

 

If only W-2 wage documents are present in the application with no tax documents, then all wage income will be assigned to Borrower 1 by default. Use the Employee dropdown to allocate the income to Borrower 2 or Other.

 

 

 

Income Types The borrower’s income is split into two income types:

 

• Fixed Income (top section) - Base, PTO, Holiday, and Non-Taxable

• Variable Income (bottom section) – Overtime, Commissions, Bonus, Shift Differential, Tips, Mileage/Trip, and Other (any income the system could not identify)

 

 

 

 

Variable income is excluded by default, but each income stream may be included individually.

 

 

 

Paystub data is separated into the following columns:

 

• Current Pay – current pay amount extracted from the most recent paystub uploaded

• Current Pay Monthly - monthly income calculated from Current Pay

• YTD Earnings – YTD amount extracted from the most recent paystub uploaded

• YTD Monthly – monthly income calculated from YTD Earnings.

 

 

Manual Overrides for Paystub data are only available for the Current Pay and YTD Earnings fields and not for Current Pay Monthly or YTD Monthly. Current Pay Monthly and YTD Monthly are automatically calculated based on the Current Pay and YTD Earnings values.

 

 

Prior year(s) data is separated by tax year. For fixed income, monthly W-2 income is based on Box 5 of the W-2. If Box 5 is blank and Box 1 is not, then Box 1 income is used. Monthly W-2 income is based on 12 months, even if the borrower did not work the entire year. Prior year(s) variable income may be entered manually using VOI/VOE data.

 

 

 

Calculating Fixed Income:

 

When calculating Fixed Income, note the monthly values in the W-2 section. This is especially important when calculating YTD+12 and YTD+24, as W-2 values will be used in the Wage income calculation.

 

The prior year(s) W-2 fields are calculated using the total W-2 amount extracted from the W-2 divided by 12 months. Using the Calculation Method Dropdowns, Fixed income is calculated as a group, and the default calculation method is the Current Average.

 

To change the default calculation, use the Calculation Method drop-down, which provides four standard calculation methods: Current Average, YTD Average, YTD + 12, and YTD + 24.

 

 

 

 

Cumulative Wage Total Income:

 

The Monthly Qualifying Income for each of your borrower’s employers is included by default in the cumulative Wage Total Income value at the top of the Wage Income tab.

 

To exclude income from an Employer, change the dropdown from Included to Excluded.

 

 

 

 

Including Wages in Net Qualifying Income:

 

LoanBeam will use Wage Total Income from the Wage Income tab by default when calculating Qualifying Income if paystubs are present in an application.

 

 

LoanBeam will use Wage Total Income from the Wage Income tab by default when calculating Qualifying Income if paystubs are in an application.

 

 

 

 

To instead, use wage income data from Line 1z of Form 1040, change the dropdowns on the “Borrower Wages, salaries considered elsewhere (Line 1z)” and “Co-Borrower's Portion of Wages (Line 1z)” rows on the main sheet from Excluded to Included.

 

 

 

This will change the wage income from W-2 income to wages taken from the borrowers’ tax forms.