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Corporate Relo Mortgage Qualification: New Salary, Signing Bonus & COLA

The relo buyer’s income qualification question is always the same: what can the lender count, and when can they count it? The answer depends on which components make up the total compensation.

Qualifying on a New Employment Offer Letter

The most important income qualification question for relo buyers: can I get pre-approved before my new job starts? Yes — with the right lender and the right documentation: (1) What lenders require: a signed offer letter from the new employer showing: job title, start date (within 60–90 days of closing), and base salary or annual compensation. (2) W-2 employment: most lenders qualify W-2 employees on offer letter income. The employee must start before the first mortgage payment is due. Some lenders require the first pay stub before closing; others allow closing on the offer letter alone. (3) Prior employment matters: a 2-year employment history in the same field is typically required. A VP of Finance moving from one financial firm to another: prior history in finance qualifies the career continuity requirement. A career change (e.g., military to corporate): some lenders apply specific rules for career transitions. (4) Self-employed transition: a W-2 employee starting a W-2 position at a new company qualifies differently from a W-2 employee transitioning to 1099 / independent contractor status. W-2 to W-2: offer letter qualification is standard. W-2 to self-employed: requires 2 years of self-employment income documentation.

Signing Bonuses: When They Count

How lenders treat signing bonuses for relo buyers: (1) One-time signing bonus (does not count for income): a signing bonus paid once at hire is a non-recurring payment. Lenders do not count it as qualifying income. It counts as an asset (liquid funds) once received and seasoned in the bank for 60 days. (2) Annual performance bonus (may count with history): if the buyer has a 2-year history of receiving annual performance bonuses in the same or similar role, the bonus income may qualify (averaged over 24 months). The new employer’s offer letter must reference the bonus structure and the prior employer’s W-2s must show the bonus history. (3) Using signing bonus for down payment: receive the signing bonus, let it season in a bank account for 60 days, document its source (offer letter or employment agreement), and include it in the down payment documentation. Lenders will ask for the large deposit documentation. The offer letter or employment agreement is the source document. Down payment strategy guide.

COLA and Temporary Allowances

Many relo packages include temporary cost-of-living allowances and other supplements: (1) Permanent base salary increase (new market pricing): if the new job pays more than the prior one because of the new market’s higher cost of living, and this is a permanent base salary (not a temporary supplement), the full new salary qualifies from day one on the offer letter. (2) Temporary COLA supplement (may not count): if the compensation includes a temporary COLA supplement (e.g., $12,000/year for 2 years to offset relocation cost-of-living adjustment) that expires after the specified period, the lender may not count the temporary supplement for long-term qualification. The qualification will be based on the permanent base only. (3) Housing allowances: some executive packages include a monthly housing allowance. If this is a defined benefit in the employment agreement for a specified term, lenders treat it similarly to COLA — counted if long-term, discounted if temporary. Confirm the structure with the lender’s underwriting guidelines before the offer.

Prior Home Equity and Down Payment Documentation

Relo buyers frequently use proceeds from the prior home sale for the down payment. The lender documentation path: (1) GBO or BVO proceeds: the relocation company closes the prior home purchase and provides the employee with the net proceeds. These funds are clean: source of funds = relocation company buyout. Documentation: closing settlement statement from the prior sale. (2) Open market sale proceeds: same as any home sale — settlement statement documents the source. Timing: ensure the prior home closes before or simultaneously with the new purchase close. If using GBO, the timing is coordinated by the relo company. (3) Company relocation assistance funds: if the company provides a lump sum relocation allowance that the buyer uses for down payment, this requires additional documentation: confirmation from the employer that it is a gift/supplement (not a loan) and the source documentation. Lender requirements vary; confirm before relying on this for down payment.

Corporate Relocation Guides: Relo Package — Search Timeline — Luxury Buying — Mortgage Qualification — Selling Your Home — Temp Housing — Agent Selection — Florida Markets

Frequently Asked Questions

Can I get pre-approved for a mortgage before starting a new job?

Yes, with a signed offer letter showing title, start date (within 60-90 days of closing), and base salary. Most lenders require the employee to start before the first mortgage payment is due. Some require the first pay stub before closing.

Does a signing bonus count for mortgage qualification?

A one-time signing bonus: no (non-recurring). Counts as an asset for down payment after 60 days of seasoning. Annual performance bonus with 2-year history: may qualify if prior W-2s show the pattern and new offer letter references the bonus structure.

Does COLA count for jumbo mortgage qualification?

Permanent base salary increase: yes, fully. Temporary COLA supplement: lenders typically qualify on permanent base only. The temporary supplement may be discounted or excluded depending on the lender's underwriting guidelines.

How do I document relocation buyout proceeds for down payment?

The closing settlement statement from the GBO or BVO transaction documents the source. Funds are clean with a clear source. Ensure prior home closes before or simultaneously with the new purchase close.