I Got a Raise After My Pre-Approval. When Does the Higher Income Count?

A raise from your current employer can count as soon as the new rate is documented, when your pay is a salary or a fixed hourly rate with guaranteed hours. When your pay is hourly with hours that move, or arrives as bonus, commission or overtime, the raise gets averaged into a twelve-month history instead of replacing it. The pay type sets the timing.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, NMLS #483943, through C2 Financial Corporation, licensed in fifteen states. This question usually arrives with some urgency attached, because the raise and the right home tend to show up in the same month. Somebody has a pre-approval letter built on the old salary, a review that just landed, and a listing they want to move on this weekend. The honest answer is that one of those pay types updates in about two weeks and the other updates over about a year, and knowing which one you have is worth more than knowing the size of the raise.

Why does the type of pay decide how fast a raise counts?

Employment pay does not arrive in the file as one number. Fannie Mae's Selling Guide splits it into base income and everything else, then splits base income again into fixed and variable (B3-3.3-01, Base Income, revised March 4, 2026). Each bucket has its own history requirement, and that requirement is the whole answer to the timing question.

Fixed base income is a set salary, or a fixed hourly rate with guaranteed minimum hours. Small variances between pay periods do not move it out of this category. For fixed base pay, the guide states plainly that a minimum history is not required for it to be included as qualifying income. There is no seasoning period to wait out. A salary of a certain amount, documented as current, is the figure the calculation uses.

Variable base income is a fixed hourly rate with hours that fluctuate, or an hourly rate that itself varies. Here the guide requires a minimum twelve-month history, and the qualifying figure is an average built from year-to-date earnings and the previous year, covering at least twelve months. A raise to the hourly rate does not replace that average. It joins it, and it moves the average only as fast as new months accumulate.

Bonus, commission, overtime and tips live in their own section with their own averaging rules (B3-3.3-02, revised March 4, 2026), and behave more like variable base pay than like salary. If a meaningful share of your raise came through one of these, the way overtime and bonus income get averaged is the page that explains what happens to it.

So two people can get the same raise on the same day and see completely different qualifying numbers, purely because one of them is salaried and the other is paid by the hour. That is not a judgment about the work. It is a rule about how much evidence each kind of pay needs before a thirty-year loan will lean on it, which is the same reason a lender asks for two years of almost everything in the first place.

What has to show up before the higher number can be used?

Two things, and they are separate.

The first is documentation of the pay itself. For base income, the guide accepts a completed Request for Verification of Employment (Form 1005) from your employer, or the most recent paystub together with the most recent W-2. Either route works. The 1005 is a form the lender sends to your employer's payroll or human resources contact, and it states your current rate directly, which is why it can sometimes move faster than waiting for a paycheck.

The second is a consistency check that catches a lot of people by surprise. The guide requires that the qualifying income be consistent with year-to-date base earnings, and where the year-to-date figure does not reflect at least thirty days of earnings, it gets compared against the prior year instead.

That sentence is the reason the order of operations matters. A raise effective in June leaves a year-to-date total that is a blend of the old rate and the new one. For fixed base pay, the new rate is still the figure that gets used, but the file needs something that shows the new rate unambiguously rather than leaving a reviewer to back it out of a mixed year-to-date column. One full pay period at the new rate solves that cleanly. So does the 1005.

There is a third thing worth knowing even though it is not about the raise. Employment gets re-confirmed close to the finish line: a verbal verification of employment is required within ten business days before the note date for employment income (B3-3.1-04, revised March 4, 2026). A pay change that happens mid-file is not something that slips by unnoticed, and it is not something you need to hide. Tell your loan officer when it happens. Late surprises are the expensive kind.

What should I send, and in what order?

1. Get the effective date in writing. An email from your manager or human resources naming the new rate and the date it starts is enough to begin the conversation. It is not usually enough on its own to change the calculation.
2. Send the first full paystub at the new rate. One complete pay period at the new number, with year-to-date figures on it, is the cleanest single document you can produce.
3. Ask whether the Form 1005 route is faster. If your next payday is three weeks out and you are actively shopping, a verification of employment sent directly to your employer can close the gap. Your loan officer sends it, not you.
4. Ask for the recalculated monthly figure, not just a new letter. The number that matters is monthly qualifying income. A letter is the output; the calculation is the thing to check.
5. Re-run the payment before you re-run the price. A higher qualifying income raises a ceiling. It does not change what a payment feels like in your own budget. What you can borrow and what you should borrow stay two different figures after a raise, the same as before one.
6. Then ask for the updated pre-approval letter, dated and reflecting the new figure.

If your raise came with a title change, a schedule change, or a move from hourly to salary, treat that as a bigger conversation than a rate update. The rules for starting a new position or working from an offer letter can apply even when the employer stays the same.

When should I ask for the new letter, relative to making an offer?

Before you revise the offer. Not after.

A pre-approval letter is the document the other side of the transaction reads, and revising an offer upward while the letter still shows the old number creates an obvious gap. The listing agent will very likely call your loan officer, which is normal and usually helps you; what that call can and cannot cover is worth reading before it happens. The sequence you want is: documents in, calculation updated, letter reissued, then the revised offer goes out with a letter that matches it.

Worth saying plainly: no letter from anyone is a loan commitment. A letter reflects a review of what was provided on a given date. It is a strong, useful document and it is not a promise, which is exactly why the number on it should be one somebody actually calculated from a paystub rather than one somebody typed.

The mistakes I see

Trading the history for the raise. A promotion that converts commission or overtime into a higher salary can raise total pay while lowering qualifying income, because the variable piece carried a documented history and the new salary starts fresh at its own rate. Total up, qualifying down. This is arithmetic, it can be run before you accept, and it is much easier to run in advance than to undo.

Raising the offer on the letter instead of the calculation. The letter is downstream. If the calculation has not been redone with a paystub in hand, the higher number is an estimate, and an estimate is a poor thing to write into a contract.

Spending the raise twice. A new payment taken on in the same month as the raise can eat the qualifying gain entirely, because the debt-to-income ratio moves on both sides. A car payment added the week the raise lands can leave the file exactly where it started.

Assuming a raise fixes a file that has a debt problem. If what is limiting the number is the monthly obligations rather than the income, more income helps less than paying off the right account does. Ask which side of the ratio is actually binding before you plan around the raise.

An illustration

Numbers below are made up to show the mechanism. They are not a quote, a rate, or anybody's real file.

Two people each get a raise of $6,000 a year. Both were earning $72,000 and now earn $78,000. Same employer, same effective date of July 1, same file reviewed at the end of September.

The first is salaried. Fixed base income, no minimum history required, so the calculation uses the current rate:

New annual salary              $78,000
Divided by 12 months          ÷      12
────────────────────────────────────────
Monthly qualifying income       $6,500

The second is paid hourly with hours that move week to week. Variable base income, so the calculation averages year-to-date earnings with the prior year, across at least twelve months:

Prior year W-2                 $72,000   (12 months)
Year to date, Sept 30          $55,500   ( 9 months)
────────────────────────────────────────
Total earnings                $127,500   (21 months)
Divided by 21 months          ÷      21
────────────────────────────────────────
Monthly qualifying income       $6,071

Same raise, same dollars in the bank, and a difference of $429 a month in what the file can use. The second number climbs every month as more of the year runs at the higher rate, and by the following spring the gap has mostly closed on its own. Nothing went wrong in the second case. It is just on a slower clock, and the person shopping with it should know that before writing an offer rather than after.

What to do now

Send your loan officer the pay change the week it happens, and ask one question: does this move my number now, or does it move it over the next twelve months?

That answer tells you whether to wait for a paystub or shop today. If you want the payment picture while you wait, run your scenario first, with no credit pull, no account and nobody calling you. Then bring the stub, and we settle the qualifying figure with arithmetic instead of estimates. It is the same work that goes into a real pre-approval, done in the right order.

Nothing here is a loan approval, a denial, or a commitment to lend. Program guidelines differ between agencies and change over time, and what applies to a specific file is worth confirming rather than assuming.

Common questions

How long after a raise can I use the higher income for a mortgage?

For a salary or a fixed hourly rate with guaranteed hours, there is no waiting period built into the conventional rules. The guide does not require a minimum history for fixed base income, so the new rate can be used as soon as it is documented, usually with one full paystub at the new rate or a Request for Verification of Employment from your employer. For hourly pay with fluctuating hours, or for bonus, commission and overtime, expect the raise to be averaged into a twelve-month history rather than used at its current level.

Do I need a new pre-approval letter after a raise?

Only if you intend to use the higher income. A raise does not invalidate an existing letter, and a letter built on the lower figure is still accurate as far as it goes. If you want the larger number in front of a seller, ask for the calculation to be redone from an updated paystub first, then have the letter reissued to match. Revising an offer upward while the letter still shows the old figure is what causes friction.

Will a raise change my pre-approval amount?

It can, and the size of the change depends on the pay type and on the debt side of the file. Qualifying is a ratio, so more income raises the ceiling only to the extent that monthly obligations stay where they are. If a new payment was added in the same stretch, the two can cancel. Ask for both halves of the ratio when you ask for the new number.

Does a promotion help or hurt a mortgage application?

Usually it helps, with one exception worth pricing in advance. When a promotion converts overtime or commission into a higher base salary, the variable income that carried a documented history goes away and the new salary is used at its own rate. Total compensation can rise while the qualifying figure falls. It is knowable before you accept, and a lot harder to address afterward.

Can I use a raise that starts after closing?

No. Qualifying income is built from pay that is being received and is expected to continue, which is why a future rate with no earnings behind it does not reach the calculation. A raise effective after the note date is a household budget improvement rather than a file input. If the timing is close, ask whether waiting for the first paystub at the new rate is worth more than closing sooner.

What documents prove a pay raise to a lender?

For base income, either a completed Request for Verification of Employment (Form 1005) from your employer, or your most recent paystub together with your most recent W-2. A verbal verification of employment is also required, and for employment income it has to be done within ten business days before the note date. A manager's email naming the new rate is useful context and is rarely sufficient on its own.