TAG Lending Group
Income is where most loans stall. Our team works qualifying income out of the actual documents — pay stubs, W‑2s, tax returns, K‑1s and rental schedules — so the number the loan is built on is the number that holds at underwriting.
Short answer: qualifying income is the monthly income a lender can document, verify and reasonably expect to continue. It is not your gross salary. Salaried income is the base salary divided by 12. Bonus, overtime and commission are averaged over a documented history, usually two years. Self-employed income comes from net profit on the tax returns with non-cash deductions such as depreciation added back. Rental income is taken from Schedule E or the appraiser's 1007, reduced by a vacancy factor. The underwriter makes the final determination.
Estimates only. Not a commitment to lend. Final income is determined by underwriting.
Same discipline, different job depending on who you are.
MLOs & Brokers
Borrowers
Realtor Partners
Qualifying income is monthly, documented and repeatable. Here is how the common types are treated, and the TAG program built for each.
| Income type | What's used | What trips people up |
|---|---|---|
| Salaried W‑2 | Base annual salary divided by 12 | A raise mid-year needs documenting, or the older figure is used |
| Hourly | Hourly rate × guaranteed hours, averaged over the pay history | Variable hours get averaged down, not up |
| Overtime, bonus, commission | Averaged across the documented history, usually two years | Less than a two-year history often means it can't be counted at all |
| Self-employed | Net profit from the returns, with depreciation and other non-cash items added back. See Full Doc Non-QM and Profit & Loss. | Write-offs that cut your tax bill also cut your qualifying income |
| Bank deposits | Business or personal deposits over 12–24 months in place of returns. See Bank Statement. | Transfers between your own accounts are stripped out of the average |
| 1099 contractor | 1099 totals with an expense factor applied. See 1099 Only. | Gross 1099 is not the qualifying figure |
| K‑1 / partnership | Ordinary business income at your ownership percentage | Distributions and income are not the same number |
| Assets instead of income | Qualifying liquid assets drawn down over a set term. See Asset Utilization. | Retirement and business funds are often discounted or excluded |
| Rental property | Schedule E, or market rent from the appraiser's 1007 on a new purchase. See Rental & Investment. | A vacancy factor is applied — gross rent is not what counts |
| DSCR (investor) | The property's rent against its payment. Personal income is not used. See DSCR Loan Program. | Different qualification entirely — the property qualifies, not you |
| No income used | Qualification on credit, assets and equity alone. See No Income, No Ratio. | Larger down payment and stronger reserves are the trade-off |
01
Income documents go into the secure file — pay stubs, W‑2s, returns, VOE.
02
Our team works out qualifying income by type, document by document.
03
Anything missing or unclear is flagged for a human to check.
04
A worksheet records the figure the loan is structured on.
Lenders count income that is documented, stable and likely to continue. Bonus, overtime and commission usually need a two-year history and get averaged. If you are self-employed, the business write-offs that reduce your taxable income also reduce the income a lender can use.
From your tax returns, not your deposits. Net profit is taken from the returns, then non-cash deductions such as depreciation and depletion are added back. Two years is typical, and a declining trend is usually averaged conservatively or questioned. If the returns do not reflect the real cash flow, a bank statement or profit and loss program may fit better.
Usually yes. For a property you already own, Schedule E is used. For one you are buying, the appraiser's rent schedule sets market rent. Either way a vacancy factor is applied, so gross rent is not the figure that counts. For investment property where personal income is not used at all, see DSCR.
There are programs for that. DSCR qualifies an investment property on its own rent rather than your personal income. Bank statement, 1099 only and asset utilization programs exist for self-employed borrowers. A licensed loan officer can tell you which fits.
Once the documents are in the file, the calculation itself is fast. What takes time is collecting complete documents. Missing pages are the single most common delay.
No. It produces an income figure to structure a loan around. A pre-approval requires a full application, credit review and underwriting. Final income is always determined by the underwriter.
Yes. TAG is a wholesale and non-delegated correspondent lender. See wholesale lending for brokers and non-delegated correspondent.
When the standard calculation does not fit the borrower, one of these usually does.
For loan officers
Our operations team runs the income off the documents before the file moves. You get the figure, the worksheet behind it, and the problems flagged early — instead of rebuilding tax returns at 9pm and finding out at underwriting.
Group call, Fridays 10am ET and Mondays 1pm ET.
TAG Lending Group, LLC · NMLS #2329372 · Equal Housing Opportunity
This page provides general information only. Nothing here is a commitment to lend, a loan approval, a pre-approval, or an offer of credit. Qualifying income is determined by the underwriter reviewing a complete application and supporting documentation. Results will vary by loan program, investor and borrower circumstances.
TAG Lending Group, LLC is licensed as a mortgage lender in Florida, South Carolina, Tennessee, Texas, Georgia, Michigan, New Mexico and Ohio. TAG Lending Group, LLC is licensed as a mortgage broker only in Connecticut, Pennsylvania and New Jersey, and is not a lender or correspondent lender in those states. TAG Lending Group, LLC is not licensed in North Carolina.
No interest rate, APR or pricing is quoted on this page. Rates and program terms are subject to change without notice and require a licensed loan officer to quote.