Tech compensation packages look great on paper until you try to use them to buy a house. A total comp of $400,000 sounds like it should make mortgage approval straightforward. Then the lender asks for two years of W-2s, looks at the base salary line, and suddenly the number that matters for qualification is a lot smaller than the one that shows up in offer letters and LinkedIn salary threads.
This catches people off guard more than it should. The mechanics of how lenders treat stock-based income are consistent enough that a little preparation changes the outcome significantly — but most tech employees don’t think about it until they’re already under contract and the clock is running.
How Lenders Actually Look at This
Base salary is easy. It’s the same number every month, it shows up on pay stubs, it doesn’t require interpretation. RSUs, options, and performance shares are different because they fluctuate — with vesting schedules, with company stock price, with whether grants continue at all. Lenders don’t ignore that variability. They price it into how much of that income they’re willing to count.
RSUs tend to fare better than options in underwriting because they vest on a schedule and get taxed as ordinary income when they do. That paper trail is readable. If RSUs have been vesting consistently for two years and the employer confirms ongoing grants, most lenders will include them in qualifying income at some level. Options are messier — unexercised options especially, where the value is theoretical until someone actually sells. Lenders vary on how they handle options and some discount them heavily or exclude them entirely regardless of how much they’re worth on paper.
Documentation
Two years of W-2s and tax returns is the starting point. What lenders are looking for is a pattern — stock income appearing consistently over that period at levels that support the income claim being made. Gaps, big swings, or income that showed up once and didn’t repeat all create questions that need answers.
Vesting schedules and grant agreements matter here. So do bank statements showing deposits from share sales landing in actual accounts. If there’s been a recent employer change the documentation requirement gets heavier, not lighter — a written compensation agreement showing future grant structure helps, but lenders are skeptical of income that hasn’t been received yet regardless of what an offer letter says. The history is what they’re buying. Promises about future grants don’t move underwriters the way two years of consistent deposits do.
What Actually Improves the Application
Cash reserves do more work in this situation than most borrowers expect. Six to twelve months of housing expenses sitting in liquid accounts changes the risk profile of the application in a way that’s concrete and legible to underwriters. Stock income that fluctuates is less concerning when the borrower clearly doesn’t need every dollar of it to stay housed if something changes.
Down payment size matters for the same reason. A lower loan-to-value ratio reduces the lender’s exposure and makes income variability less consequential. A lot of tech employees end up selling vested shares specifically to fund the down payment — converting equity that was floating in a brokerage account into stable documented cash. That trade often makes sense even if it creates a tax event, because the mortgage outcome justifies it. Debt-to-income ratio is the other lever. Keeping existing debt low ensures that even if a portion of stock income gets discounted or excluded in underwriting, the base salary alone or base plus partial RSU income still clears the qualifying threshold.
Loan Type and Who You Work With
Not every lender handles this the same way. Jumbo loan specialists in tech-heavy markets like the Bay Area, Seattle, and Austin have seen enough equity compensation structures that they’re not learning on your file. Portfolio lenders — banks holding loans on their own books rather than selling to secondary markets — sometimes have more flexibility in how they evaluate complex income because they’re not constrained by the same secondary market guidelines.
The mortgage professional matters as much as the loan product. Someone who works primarily with W-2 employees in straightforward income situations is going to struggle with a file that has four income streams, two of which are stock-based and one of which involves exercised options in a company that went public eighteen months ago. Finding someone who does this regularly isn’t hard in markets where tech workers are buying homes — it just requires asking the right question before engaging rather than discovering the mismatch mid-process.
The Consumer Financial Protection Bureau has plain-language resources on how lenders evaluate income and documentation that are worth reading before starting the application process — not because they’ll replace a good mortgage professional, but because going in knowing the terminology makes every conversation with one more productive.