I’m not sure why my mortgage underwriter is asking for a letter explaining why my year-to-date earnings from my pay stubs don’t match the biweekly salary amount they’ve calculated. My W-2s show $46k for 2022 and $48k for 2023, but my recent pay stubs for 2024 show a YTD of $50k because I received a raise in 2024. Could this be why there’s a discrepancy? I thought this might be too simple of an explanation, but I’m preparing to write the letter and would appreciate any advice.
Just write a straightforward letter stating the facts: ‘I received a raise of X amount on this date.’ That’s usually all they need for clarification.
Chen said:
Just write a straightforward letter stating the facts: ‘I received a raise of X amount on this date.’ That’s usually all they need for clarification.
Exactly, your mortgage broker is likely just trying to complete their due diligence and needs to document this for their records to proceed with your application.
The underwriter is likely calculating your annual income based on your current bi-weekly pay and comparing it against your YTD earnings. If these don’t match because your salary increased recently, that’s what you need to explain. Just confirm that you got a raise and specify the effective date in your letter.
@Yan
That makes sense, thank you! I’ll clarify the raise in my letter.
Paris said:
@Yan
That makes sense, thank you! I’ll clarify the raise in my letter.
It sounds right. Underwriters just want to verify that there are no discrepancies that indicate potential issues. It’s a common procedure.
They’re essentially trying to make sure that the salary you report is consistent and no time was missed from work. If your earnings were lower earlier in the year due to a lower salary, then jumped after a raise, that would explain the discrepancy. A brief explanation about your raise should resolve any concerns.
@Zuri
Thanks for breaking it down, this helps a lot. I’ll include these details in my letter.
Paris said:
@Zuri
Thanks for breaking it down, this helps a lot. I’ll include these details in my letter.
Glad to help! Yes, that’s all it really takes. Just the facts and the dates should clear up any confusion.
It’s a standard request for underwriters. They need to ensure all income reported is verifiable and consistent. Explaining any variance with a simple letter is part of the process. Include any official documentation from your employer if possible to support your claim.
@Case
Will do, thanks for the advice!
Paris said:
@Case
Will do, thanks for the advice!
You’re welcome! It’s usually a straightforward process once you provide what they need.
Your loan officer should be able to provide some guidance on how to word the letter as well to make sure it satisfies the underwriter’s requirements.
Simply stating the facts about your raise should suffice. It’s not uncommon for underwriters to request this kind of clarification.
Oli said:
Simply stating the facts about your raise should suffice. It’s not uncommon for underwriters to request this kind of clarification.
Appreciate the confirmation, I’ll keep it straightforward and factual.
Sometimes it’s not just about the pay periods but how they project your annual earnings based on your current pay. Explaining any discrepancies due to a raise will help them adjust their figures.
It’s just a formality but an important one. Make sure to date and sign the letter to verify that you acknowledge the explanation.
They just want to make sure there’s no unexplained gap or inconsistency that might affect your ability to make mortgage payments. Clarifying about your raise will answer their questions.
It’s standard procedure to verify all income changes. Just note the date of your raise and the new salary amount.
Blaise said:
It’s standard procedure to verify all income changes. Just note the date of your raise and the new salary amount.
Exactly, it’s all about making sure everything adds up correctly in their calculations.