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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Thanks for the helpful replies here.

Ultimately, once again, my take home is $20K if I do not contribute to a 401(k) and $16-18K if I do. My monthly draw is somewhat variable. Quarterly distributions all go to taxes (as I’d know, my CPAs are my own accounting firm and tell me exactly what to pay), and a big chunk of my year end distribution goes to taxes. I don’t count the rest of the year end distribution for mortgage purposes because I’m not using that to pay a monthly PITI as employees typically wouldn’t count their potential year end bonus. It’s based on a lot of factors and not guaranteed. I do have cash flow spreadsheets so this is not an area of grey for me. When I contacted a mortgage lender to understand what I could qualify for, even with an 800 credit score they said 800K would be a stretch because they wouldn’t count my year end distribution either only the monthly draw.

That said, it sounds like many either had a huge down payment or family help to keep the payments down. This is helpful to understand. I have very little savings due to my divorce.[/quote]

Mortgage brokers actually do count bonuses for purposes of mortgage qualification, but the person must have gotten the bonus for two years for it to count. Many employees have bonuses make up a significant part of their earnings so it would be bizarre to exclude them entirely. Of course, bonuses are supposedly never guaranteed but in many industries they basically are -- just think about all the associates who work for you.  You should be counting the year end distribution in determining what you can afford (as should any mortgage broker) unless you really have reason to believe it will be zero many years.[/quote]

Agreed. You need to talk to another broker. My firm writes a letter whenever I apply for a loan that says my full comp from last year (in your case 650k) that is used to qualify for a loan at that income.

I think the bigger thing to be concerned about is you have a lot of money leaking to places where you don’t know where it’s going. I make upper six figures (850-950k) and I take home about half of my gross. That includes 401k, health insurance, extra FICA employer taxes, etc. For you, that would be 25-30k, not 20k. What I’m trying to tell you is that 19-20k/month is EXTREMELY unusual on 650k gross and you need to figure out where the extra 100k+ a year (post-tax) is going. You owe it to yourself and your kids in case something is awry with your finances that you’re not aware of. [/quote]

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