Answering the "What is your income question"
Determining your qualifying income for home loan purposes is obviously one of the most important things lenders do to see if they will give you a loan.
Current traditional mortgage lending rules REQUIRE ALL LENDERS to document sufficient monthly income to safely afford the house payments. For all your traditional loans, like Fannie Mae, Freddie Mac, FHA loans, and VA loans, this means regular documented income, like pay stubs, tax returns, social security, child support, etc.
For self employed borrowers, lenders will look at your last two-years Federal Tax Returns, both business and personal. If you get 1099's, you are considered self-employed.
We look at your two most recent return, and simplistically, whatever you report to the IRS as taxable income is what we use for mortgage qualifying. If you write your income down, that is great for not paying taxes, but a gigantic problem for home loan qualifying. Learn more about self-employed mortgage loans.
For those who received tipped income, commission, or others who income varies, your income will be averaged over two-years based on W2's and tax returns.
What we are seeing available today is generally bank statement loan programs, where lenders will use either 100% of personal bank statement deposits, or 50% of business bank statements as your qualifying income. If you are a joint owner, business accounts are 50% of deposits, then divide by the number of owners.
The terms are generally available as both fixed and adjustable rate mortgages, with significantly higher interest rates than traditional loans. Down payment requirements typically tend to be at least 20% down or more, but as little as 10% is possible with good credit.
Old fashioned stated income loans are also becoming available again. These loans are known as "Outside of Frank Dood" loans that don't meet the strict "Qualified Mortgage" rules that dictate traditional mortgage loans.
Loan income qualifications are based on verified assets. These programs vary, but a common version is where they simply divide your verified liquid assets by 5-years (60 months). For example: If you have $200,000 in liquid assets, divide that by 60 months, equals $3,333 a month income.
This program is pretty straight forward. You simply prove you have enough liquid assets to cover the loan balance.
YES! If one of these alternative mortgage loan programs fits your situation, and you meet the basic criteria above, by all means, you should apply online or call our office at (651) 552-3681 to discuss your situation.
Mortgages Unlimited, Inc - St Paul Office
33 Wentworth Ave E, Suite 290
St Paul, MN 55118
Office (651) 552-3681
Fax (651) 994-6425
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VA, and USDA Approved Lender
We are an Approved Lending Institution for FHA, VA, and USDA Government Loans. While we are an approved lender, we are not part of HUD, FHA, the Veterans Administration or the United States Department of Agriculture. We are not acting on behalf of, or under the direction of HUD/FHA, VA, USDA, or the Federal Government in any way. FHA and VA do not lend directly to the public, only through approved lending institutions like Mortgages Unlimited.
Mortgages Unlimited, Inc. Nationwide Mortgage Licensing System and Registry (NMLS) # 225504 Saint Paul Branch - NMLS # 387944. Joe Metzler, Licensed Mortgage Loan Originator NMLS # 274132. Lending in MN, WI, and SD only.
Equal Housing Lender © 1998-2018 - Joe Metzler for Mortgages Unlimited, Inc. Not an offer to enter into an interest rate lock agreement.