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Everything posted by liverichly

  1. They've been doing it for a long time now through a program called NACA, which takes 6-9 month on average. For this new program, here is some info from a Bank of America LO that was shared end of last week: Program is only available for properties located in majority black and/or Hispanic census tracts in select cities. Race of buyer does not matter. 132k income limit in Dallas. 50% DTI Max. All manual underwrites and a full doc underwrite is required for pre approval . We give 10k towards down payment and cover all non recurring closing costs (we do not cover escrow). No mortgage insurance. 2-4 unit allowed at 95% LTV. Primary residence only. Only first time buyers (no property owned in previous 3 years) In person 8 hour homebuyer education. Here are some basic credit guidelines. 12 months on 3 tradelines, traditional or non traditional. No lates in last 6 months, no more then 1 30 day late in 12 months. No reserves with 12 months rental history. 3 months reserves without rental history. Most of your other credit guides mirror conventional. Approximate pricing as of this morning 550 FICO 7.125%, 640 FICO 7.00%, 720 FICO 6.5%.
  2. When income is variable (such as hourly income that isn't exactly 40 hours each week) then an average hours from the time you begun full time employment until the lender receives the employment verification form is used to calculate your qualifying income. So if you are working 38, 33, 35, 36, 40, 41, 40, 40 hours over the last 8 weeks then the average hours will be 37.875 multiplied by your hourly wage = weekly amount of qualifying income (x 52 weeks / 12 months) = monthly qualifying income.
  3. If your employment is less than 40 hours a week but still is full time hours then it can still be considered full time employment, but most lenders will usually need at least 32+ hours worked per week. In your situation it's not a brand new job and you have a history of working less than full time, so you're really going to need to put in some effort documenting that it is actually full time. I'd recommend you get something in writing from your employer that confirms the hours you are working qualify you as a full time employee with full benefits, etc. Assuming you are paid hourly (vs. a salary) lenders will need documentation of your average full time hours in order to properly calculate your income, that can be obtained by your employer completing a Verification of Employment form.
  4. There is something called "boarder income" which FHA, Freddie Mac and Fannie Mae's guidelines are below. FHA allows it with a 2-year history of reporting it on tax returns, but Fannie & Freddie only use it with live-in aides for disabled individuals. Boarders of the Subject Property (TOTAL) (a) Definition Boarder refers to an individual renting space inside the Borrower’s Dwelling Unit. (b) Standard Rental Income from Boarders is only acceptable if the Borrower has a two year history of receiving income from Boarders that is shown on the tax return and the Borrower is currently receiving Boarder income. (c) Required Documentation The Mortgagee must obtain two years of the Borrower’s tax returns evidencing income from Boarders and the current lease. For purchase transactions, the Mortgagee must obtain a copy of the executed written agreement documenting their intent to continue boarding with the Borrower. (d) Calculation of Effective Income The Mortgagee must calculate the Effective Income by using the lesser of the two year average or the current lease. The following chart contains requirements related to rental income from a Borrower’s 1-unit Primary Residence: 1-unit Primary Residence rental income eligibility requirements Eligibility Rental income generated from the Borrower’s 1-unit Primary Residence, including rental income from an ADU may be used to qualify a Borrower with a disability provided the rental income is from a live-in aide. Typically, a live-in aide will receive room and board payments through Medicaid waiver funds from which rental payments are made to the Borrower. Documentation Evidence that the Borrower has received stable rental income from a live-in aide for the most recent 12 months Qualification The rental income may be considered in an amount up to 30% of the total stable monthly income that is used to qualify the Borrower for the Mortgage Boarder Income Income from boarders in the borrower’s principal residence or second home is not considered acceptable stable income with the exception of the following: When a borrower with disabilities receives rental income from a live-in personal assistant, whether or not that individual is a relative of the borrower, the rental payments can be considered as acceptable stable income in an amount up to 30% of the total gross income that is used to qualify the borrower for the mortgage loan. Personal assistants typically are paid by Medicaid Waiver funds and include room and board, from which rental payments are made to the borrower. The HomeReady mortgage eligibility requirements include an additional exception. See Chapter B5-6, HomeReady Mortgage. The following table provides verification requirements for income from boarders. ✓ Verification of Income from Boarders Obtain documentation of the boarder’s history of shared residency (such as a copy of a driver’s license, bills, bank statements, or W-2 forms) that shows the boarder’s address as being the same as the borrower’s address. Obtain documentation of the boarder’s rental payments for the most recent 12 months.
  5. There are certain loan programs, under the "Non-QM" umbrella, that will take the credit score from the higher wage earner to qualify. So if that would be your wife then her 680 would be used for eligibility and qualifying purposes. Think of it as a sub-prime loan, if you remember those from ~15 years ago, so it has higher rates than your traditional Fannie/Freddie mortgage but it allows certain flexibilities but require you to be better qualified in some areas (namely in the down payment category). Still, with a 550 score you would also be eligible for an FHA loan with a minimum 10% down and VA loans don't have a minimum score (if you or the Mrs. are a Veteran).
  6. What you've been told is correct, in order to use a 2nd job as employment you must have a history of working 2 jobs for at least 24 months (full time or part time) and if you want to use part time employment to qualify then that also requires 2 years (that can be a mixture of full & part time employment). The reasoning is if there is an ample amount of time employed in that manner it's less likely you'll quit right after closing and lose that income you used to qualify with. In your situation you would've been employed for 24 consecutive months at both jobs but there was the gap during the pandemic, which unfortunately lender's don't make exceptions for. If you are short on the amount of income needed to qualify then it sounds like the way to increase your income would be to go full time at job B so the full time wages can immediately qualify and then keep job A as supplemental income. If that still doesn't give you enough qualifying income then there are "no ratio" loans which don't have a DTI requirement but they have larger down payment requirements (usually 20%+), reserve requirements (usually 12-18 months worth) and rates are higher. You could also look into a non-occupying co-borrower (co-signer) to help reduce your DTI on paper.
  7. If there is a reduction of income that you can document then that should help you do forbearance/deferment with your lender. I am not sure of FHA's exact guidelines but it's worth reaching out to your mortgage company to ask about how to get the review process started. As far as going late for 2 months, you also need to completely catch up your payments before it'll start reporting on time. So if you don't make the payments for 2 months, and then in month 3 you are able to make all 3 monthly payments, then you'll only be 60 days & 30 days late for months 1 & 2 you missed... but if you aren't able to make all 3 month's payments in month 3 then you'll continue to have late payments reporting until you are current. Some things are more important than having a good credit score though, so just have to weigh out your options if the forbearance isn't successful.
  8. FYI, since it wasn't COVID-related, then entering into a forbearance agreement may result in late payments being reported. Your mortgage lender can look into the process at your request, but typically they are approved for situations where there is a reduction in income rather than an increase in monthly debt payments. You might have better luck asking for the vet to defer payments or reduce them to a level that can be comfortably paid over longer than just 3 months.
  9. Each HELOC lender has different guidelines. It's not like a traditional 1st mortgage from Fannie, Freddie, FHA, etc. that pretty much all have the same guidelines. However, I can't see the child support judgment allowing to remain unpaid if you aren't on a repayment plan. Since the child has lived with you the entire time, I assume you aren't making payments on it because you are in the process of getting it dropped, so you very well may have to see that process through before you can obtain financing. But if you are making payments, then there'd be a chance it could remain unpaid - it's just a question you'll have to ask each HELOC lender you plan on applying with.
  10. The first question you want to ask your mother is how much she wants to sell it for if she sells it to you. Obviously if it was to someone else I'd assume she'd like to get top dollar, but when selling to family I've often found the selling family member is willing to sell for less because they won't have to use a real estate agent (saves 5-6% of the sales price in realtor commissions) plus they may want to give further discounts out of kindness. So if she wanted to sell it for market prices of $440k, minus 5% commission, that'd reduce the sales price to $418k. As I alluded to above, you don't have to use a real estate agent since it doesn't need to be marketed to anyone and the buyer has already been found (you), but I would still recommend you get a home inspection because you want to make sure you'd be OK/aware of the property condition. Assuming you aren't buying it with cash, then you'd also need to get a mortgage to purchase the property. Since you'd be buying it as an investment property, you will need to come up with the down payment from your own funds (gifts aren't permitted for investment/rental properties - only on primary residences or second/vacation homes). Investment properties can be financed with as little as 15% down, but the interest rates considerably improve with 20% or 25% down. Your eventual loan officer can run the numbers, and there is only 1 loan officer involved since the buyer only uses a mortgage. With investment properties the seller can give you a closing cost credit equal to 2% of the sales price, so if your mom wants to help reduce your total amount of money due at closing then that is a direct way to accomplish that (you'd write that in as part of the contract). When it comes to your debt to income (DTI) ratio, 75% of the rental income that the property can potentially generate can be used to help qualify even if there isn't a current lease. The way this is done is the appraiser adds an additional part to the appraisal called a "rent survey" which will use other rental properties in the area to determine what the market rent is for the home you are buying. If 75% of the market rent is less than the housing payment (PITIA), the difference is added as a monthly liability to your debt to income ratio... and if 75% of the market rent is more than the housing payment then that difference is added as monthly income.
  11. Rates are at a 2-week low now, even with today's higher than expected inflation figures. Probably has more to do with the sell off in stocks. Some interesting data points about the Sacramento market have been posted to an appraiser's blog at https://sacramentoappraisalblog.com/2022/05/11/the-housing-market-has-shifted/.
  12. Mortgage insurance is annoying, but it's not nearly as expensive as it used to be, especially with higher credit scores. Someone with a 740 score buying a primary residence would have their PMI rates at .29% (5% down), .21% (10% down), and .13% (15% down), which on a $400k loan amount would translate to $96.67/mo, $70/mo, and $43.33/mo respectively.
  13. One could only speculate, so to find out for sure you should contact that mortgage broker again and ask for additional specifics, as it appears you have enough credit history to meet nearly any lender's trade line requirements. I've never heard of MCAP though, a quick internet search brings up a mortgage company in Ontario, Canada. This section primarily discusses mortgages in the U.S.A., but not exclusively.
  14. It'll just impact the amount you can qualify for, not disqualify you completely. At most you'll have to explain what the garnishment was for and provide the garnishment terms (your employer likely has a copy they may be able to provide to you).
  15. With that credit score, unless you are a veteran, FHA and sub-prime loans will be your options. Sub-prime loans will require 30%+, do you have that? If not, then FHA (or VA) is going to be your other option. FHA (& VA) will require the last 12 months (and possibly even longer) to be free of any delinquencies as well as you'll need to have re-established credit (typically defined as 3 tradelines that have been around for the past 12 months without any late payments). How does the last 12 months of your credit history look? Edit: NACA may also be able to qualify you, but you'll need 4-6 months to go through their process, probably not a good fit if you need to buy "ASAP".
  16. The truck & car payments are killing the debt ratio. Are those payments made by the business and do you also account for their expense on your tax return? If the business has been paying them for the past 12 months, from a business account (not a personal account), and you factor in the expense on your tax return, then they can be excluded from the debt ratio and your $25k/year of income should be enough to qualify. If the business isn't paying them for the past 12 months, or you haven't factored them in as an expense on your tax return, then for self-employed people there are loan programs that will use as 12 or 24 month average of bank statement deposits to calculate your income. Rates for those programs aren't as good, but it may allow you to refinance... and if you are talking about only financing a $56k loan amount then the difference in rate won't impact the payment very much.
  17. As soon as your promotion and new salary kick in you can use it. There is even an exception that will allow you to use "projected income" to qualify within 60 days of it beginning, but that requires documentation of the upcoming promotion and pay raise.
  18. If you only need to finance $53k then depending on how much your monthly debt payments are, $25k/year of income usually will be able to qualify. Do you have a lot of monthly debt payments? If so, how much are they? How much are the property taxes & homeowner's insurance on the home?
  19. The initial Closing Disclosure isn't sent out until the appraisal has been reviewed and accepted. Assuming that is the very last item the underwriter needs to issue the clear to close, then once the appraisal is completed it's submitted to underwriting, usually takes 1-2 days for review, and upon it being accepted then the initial Closing Disclosure is sent (emailed) to you. Assuming you sign it the day you receive it, then there is a 3-day wait (including the day you signed it) before the final loan docs can be signed. So, 7 days from the time it's submitted to underwriting until you can close sounds about right.
  20. The original terms of your loan will never change, but servicing related fees can. Mortgage servicing is now more regulated than it has in the past, but charging servicing fees for various features isn't one of the areas that is regulated and the costs will vary from one servicer to another, as long as the fees are reasonable. $5 to make a 1-time payment towards principal is a reasonable cost (they are processing an additional transaction). What is even worse is you have no control over who your servicer is, if you were properly disclosed during the application process your loan's servicing rights can be sold unlimited amount of times. You can view a couple servicers fee schedules here & here. The section of RESPA that covers mortgage servicing can be found at https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1024/.
  21. With precision timing, you'll be able to close around 2-3 weeks after your 2-year BK discharge date. Loan officer can gather up all documents and even check credit, the main thing is the FHA case # can't be pulled until the anniversary, which is needed for the appraisal to be ordered, and that may take a week or even longer just depends on the local appraisers. So the appraisal comes back and can close a week or so later.
  22. With an FHA loan, judgments can remain unpaid if you are on a payment plan and at least 3 months of payments have been made with all payments made on time. Payment amount will be included in the DTI.
  23. More details are needed, but if there was an injury that caused a disability and resulted in Ch 7 BK, then that could be considered an extenuating circumstance and then FHA (and VA) would be an option with 3.5% (or 0%) down. A detailed letter of explanation with a timeline of the events that lead up to the BK would be a great start.
  24. Glad they agreed to refund you the appraisal fee. I don't think you can get inquiries removed because you didn't accept the terms. You legit inquired about applying for credit, so to me it seems like they should stick. I know there are ways to dispute inquiries as unauthorized, but that doesn't seem like it'd apply in your situation.
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