As always, if you need information on starting a new loan for the purchase or refinance of your home, contact me at trustyourlender@gmail.com
Many of my mortgage clients who are self employed simply cannot qualify for a mortgage in our current loan environment.
Decades ago, stated income and low documentation loans were created for self employed buyers who were legitimately earning high wages and had great assets; but whom also took advantage of legal tax deductions, business write-offs, and complicated real-estate investment trusts [which produced positive income while also generating tax "losses"].
As we know, over the years these programs were bastardized and created a “low-doc” environment in which anyone with a decent credit score could get virtually any purchase loan or refinance. Since the real estate meltdown which started in 2007… banks are showing no interest in ever again providing the stated income lending programs that self employed buyers have come to count on.
Here is an explanation of the problem, and what self employed borrowers can do to find out if they are eligible for a loan. Read the rest of this entry »
In the last few weeks I’ve seen several deals fall apart at the last minute due to in-properly documented “gift funds”.
If a buyer is going to receive gift funds in order to cover their down payment, closing costs, or underwriter required reserves, these are a few points to remember: Read the rest of this entry »
This morning I was on a conference call with the CFO, Strategic Planning Manager, and Sales Manager of a major bank.
Several items were discussed which lead me to believe that it is going to get exceedingly difficult over the next 6 months for houses in certain price ranges to sell. Read the rest of this entry »
Many of my clients utilize a fairly well known tax deduction know as 2106 Non-reimbursable business expenses. Basically, if you encounter business expenses required for your job or profession, and are not reimbursed by your employer, you can deduct these from your overall income.
Examples include un-reimbursed training, supplies, equipment, and professional licensing fees.
These are a great tool for reducing your overall tax liability; however, these deductions are also taken into consideration by loan underwriters as a deduction to your income.
If for example you show $12,000 per year in un-reimbursed business expenses, the underwriter will reduce your verified income by $1,000 per month. The rationale is that these business expenses are your on-going costs of staying employed and will continue to decrease your total earned income.
As always, if you are planning to buy or refinance a home, it’s important to have a conversation with your lender as soon as possible about your tax returns. Unfortunately, saving a few thousand dollars on your taxes could reduce your income to the point of not being able to qualify for a loan.
Union Bank of California, Bank of America, Wells Fargo, and Chase are all starting to come back to the table with better jumbo loan products, package discounts on first and 2nd mortgages, and are starting to explore more competitive pricing for loans between the $1 million and $1.5 million dollar mark.
Although this won’t cure all the problems in the Southern California Real-estate market; it is definitely a step in the right direction.
With 10 banks currently authorized to refund TARP money to the government, several banks increasing their liquidity to acceptable amounts, and the banking system doing a better job of underwriting and self regulating… it looks like the programs put in place at the end of 2008 by Bush and furthered early this year by Obama may have dones just enough to save the banks.
I’m personally still very worried about the overall economy, current and future plans to expand government spending, and our low national savings rate… however, for now the bank looks to be OK.
As always, if you need information on starting a new loan for the purchase or refinance of your home, contact me at TrustYourLender@gmail.com
Although many of our clients here in Los Angeles are small business owners, work in the entertainment industry, or have other forms of non-traditional employment; several of my clients still have ‘traditional’ employment, rental income, or retirement income.
Now that 99% of loans are being underwritten as full documentation or ‘verified’ loans, here is a list of the minimum information you will need to provide to your lender to prove your income. Read the rest of this entry »
I’m constantly getting questions about the $8,000 first time home buyers credit which is available through 2009.
Although many changes to this program have been proposed, the original out-line from February of 2009 still holds true.
Money.com (hosted by CNN), did the best job of outlining to whom this program would be available to. Read the rest of this entry »
In our current market, many existing homeowners are looking to take advantage of the lower prices that are available. Many homeowners are looking to upgrade their primary residence. Upgrades can be in the form of more square footage, better location, a higher priced home, or a more functional residence.
However, many repeat home buyers are finding it difficult to sell their existing residence and/or get approved for a new loan. Here is why… Read the rest of this entry »
Here in California a “conforming” loan on a single family residence is capped at a loan amount of $729,750.00
Once your loan amount gets above this magic number, your loan is considered a Jumbo or Non-Conforming loan. Jumbo loans generally carry a higher interest rate, more up front costs, and less program flexibility.
One day I will write a couple thousand words on how the secondary mortgage markets work. For now, please just understand that in the last 18 months, jumbo loan lending has basically come to a halt.
Luckily, it looks like jumbo loan programs may be coming back to the market. Read the rest of this entry »
