Mortgages for Bay Area tech professionals paid in RSUs and stock

Why stock pay trips up a mortgage application

Mortgage underwriting was built around a steady paycheck. RSUs arrive in lumps, their value moves with the share price, and the paperwork lives in a brokerage account instead of on a pay stub. A loan officer who doesn’t see these files often may count only your base salary, which can make a strong buyer look stretched on paper.

Whether you work in San Jose, Santa Clara, Sunnyvale, Mountain View, Cupertino or up the Peninsula, the question is the same: how much of your stock income will a lender count, and when?

Do RSUs count as income for a mortgage?

Often yes, once the shares have vested and been paid out to you. Unvested shares aren’t income yet. Lenders typically look for:

• A history of vested RSU income from your current employer, often 12 to 24 months depending on the program and how the award vests
• A vesting schedule showing the income continues, generally for at least the next three years
• Stock that trades publicly, valued at an average price over a recent period rather than on one good day

If the share price has dropped, some lenders count the lower of your past RSU income and what the remaining schedule is worth today. That’s one reason two lenders can look at the same vesting schedule and count different amounts of it.

Situations that change the answer

• A recent job change. RSUs from a previous employer usually don’t carry over as history. Your new base salary can often count right away; the new grant generally has to vest for a while first.
• Sign-on and new-hire grants. One-time awards are treated more cautiously than annual refreshers, and some guidelines won’t count sign-on stock at all.
• Performance-based awards. Shares tied to company or personal targets often need a longer history than shares that vest on time alone.
• Private-company stock. Pre-IPO equity is hard for a lender to value, so it rarely counts as income.
• Stock options and ESPP. Most lenders don’t count options as income. Shares you’ve bought or exercised and still hold can help as assets.

Using your stock for the down payment or reserves

Vested shares can do a lot of work even when they don’t count as income. Many buyers sell some for the down payment. Others leave them invested and use them toward the reserves a jumbo lender wants to see after closing. Because stock prices move, lenders often count only part of a brokerage account’s value toward reserves.

Timing matters. Selling shares and moving the cash between accounts creates a paper trail the lender will ask about. Talk to me before you sell, and talk to your tax advisor about when to sell. I can tell you what the lender needs; I can’t tell you what it means for your taxes.

When a bank says no

A decline on RSU income is usually one lender’s rules, not the whole market. Banks often add their own internal limits on top of the standard guidelines, and jumbo lenders each write their own. As a broker I compare across many wholesale lenders, so the job is matching how you’re paid to a lender whose guidelines fit it.

When your stock and savings are a bigger story than your income, some asset-based programs may be worth a look, on select programs for qualified borrowers. And if the honest answer is “wait for one more vest,” I’ll tell you that too.

Buying your first home with stock pay

Plenty of first-time buyers here are paid partly in RSUs, often in their first or second job out of school. That’s where the history requirement bites hardest. A short conversation early can map out when your stock income is likely to count, so you can plan the search around it instead of finding out after you’ve written an offer.

What to bring to the first conversation

• Your offer letter or grant agreement, and your current vesting schedule
• Your last two years of W-2s and a recent pay stub
• Brokerage statements showing your vested shares
• A rough price range and the areas you’re looking in

From that I can tell you which lenders are realistic for your file before anyone pulls credit. If the price point is above the county loan limit, my jumbo loans page covers what else changes.

Select programs for qualified borrowers. General information only; not a commitment to lend, a rate quote, or an offer of credit. Lender guidelines for stock compensation vary and change. This is not tax advice. Programs and terms are subject to change.