The summer has come to an end…
…the heat is hopefully calming down, and interest rates have hit a high point since 2011. It has been an interesting summer to say the least in our world with refinance mortgages calming down and purchases slowing down as well. Some larger mortgage companies have closed shop in Arizona, while other players are trying to break into the market. Large investors like Offer Pad and Open-door are trying to take up market share with local Real Estate Agents trying to fight back with flat fee listing rates; 2018 has just been “different”. Going into the fall, I wanted to chat about a driving force in qualifying for a mortgage, income.
Depending on which loan you are trying to obtain in relation to your real estate goals, make sure to have income stable. Stable income is the driving force of being able to qualify and pay for your mortgage. A lender must show the ability to repay a loan based on the characteristics of their monthly income. Below are some common examples of situations we run into.
- Commissioned borrowers will usually need to have 1 to 2 years of commission income history under their belt before using that income to qualify.
- Self-employed borrowers will need 2 years of self-employed tax returns to calculate a usable income. If you are a borrower that writes off most of their income, we do have bank statement loan programs available to qualify based on asset statements rather than tax returns.
- If you have changed jobs in the past two years, it is important to work with us to verify your job history in relation to the most current job. Whether you can qualify will depend the loan type, length of time lapse in between jobs, length on new job, and relation of new job in relation to old job.
- Investors with enough assets can use an Investor Cash Flow program to bypass any income qualifications.
Remember, everyone has a different financial profile and will be viewed in separate ways. If you would like to run your situation by us to see which programs you are eligible, don’t hesitate to reach out.
- Don’t open new debts while in contract
- Don’t quit your job
- Don’t deposit substantial amounts of cash into your bank account.
- Disclose all debts
Branch Manager, Prime Lending NMLS: 911628
For more articles from Andrew Augustyniak, visit: www.azreia.org