Most people think of the W-2 as a tax form. When you apply for a jumbo mortgage, it becomes one of the key documents a lender uses to confirm what you earn. For salaried employees the review is usually simple. For buyers whose pay includes bonuses, commissions or stock compensation, which is common among high-value home buyers, the lender has to decide how much of that income is stable enough to count.
What lenders typically ask for
- W-2s for the most recent two years.
- Recent pay stubs covering about a month, showing year-to-date earnings.
- Verification of employment, either a written form completed by your employer or a verbal check shortly before closing.
- Tax returns in some cases, for example if you have other income, rental property or a large share of variable pay.
- IRS transcripts, which the lender may request with your authorization to confirm the W-2 figures match IRS records.
Base salary
For a salaried employee, the lender generally uses current base pay from the pay stub or employer verification. The W-2s confirm your history. A recent raise is usually fine if the employer confirms it.
Bonus and commission income
Variable pay is where differences between lenders show up. Common practices include:
- Requiring a history, frequently two years, of receiving the bonus or commission.
- Averaging the amounts over that period rather than using the highest year.
- Using the lower figure, or asking for an explanation, if the trend is declining.
- Confirming with the employer that the variable pay is likely to continue.
Your W-2 does not separate base pay from bonus, so lenders rely on pay stubs, year-end pay statements or the employer's verification to break it down.
Restricted stock units and other stock compensation
Many technology, energy and finance employees in Texas receive restricted stock units (RSUs). When RSUs vest, their value is generally included in your W-2 wages. Lenders vary widely in whether and how they count it. Some count vested stock income if there is a history of vesting and a schedule showing future vesting at a similar level; some value it using a conservative share price; others count only base and cash bonus. Stock options are treated even more cautiously. If stock compensation is a large part of your pay, bring your vesting schedules and brokerage statements and ask each lender to explain its method.
Multiple employers and gaps
If you worked for more than one employer in the past two years, expect to provide a W-2 from each and to explain any gap in employment. Short gaps between jobs are common and usually only need a brief written explanation. Longer gaps, or a return to work after time away, may require a period of steady employment at the new job before the income counts. Lenders want to see a continuous, reliable earnings pattern rather than a single strong year.
Job changes
A new job in the same field with a higher salary is usually acceptable, but variable pay at a new employer may not count until there is a track record. If you are about to change jobs, talk with a loan officer before you resign or accept an offer.
Practical tips
- Download your last two W-2s and your year-end pay statements before you apply.
- Check that names, addresses and Social Security numbers match across documents.
- Ask HR how your employer handles verification requests, so they are not delayed.
- Keep pay stubs complete; lenders usually want every page.
- Remember that Texas has no state income tax, so the state boxes on a Texas W-2 are often blank. That is expected and does not affect your application.
Bottom line
Your W-2 confirms your earnings history, but the lender decides how much of it to count. Base salary is straightforward; bonuses, commissions and stock income usually require a history and are often averaged or discounted. Gathering documents early and asking lenders how they treat variable pay will help you compare offers on equal terms.
This article is general information, not mortgage, tax or financial advice. JumbTX is not a lender or mortgage broker. Confirm requirements with a licensed loan officer.