October 31st, 2014
- We are going to be getting a gift as part of our down payment. How do we handle? Gifts can be handled a couple of different ways. It really depends on which program you are using as how to best handle. If you are using a conventional program, 5% of the down payment must be your own funds - unless the down payment is more than 20% of the purchase price. FHA allows the down payment to be a gift. So, let's first determine your program and then I can provide you with the proper paper trail.
- We would like to purchase a new home and need to be prequalified. Our credit score should be fine, but we know we have a judgment. We are prepared to pay it. Should we take care of it now or wait? Let's pull credit first. If your credit score meets program guidelines, the judgment can be paid during the process. You would then provide me with all of the paperwork proving payment. Scores do initially drop when an old derogatory reporting is paid, it makes it new again.
- I am interested in purchasing a home. I am self-employed. I earn about 275,000 in gross earnings, my taxable income after deductions is about 35,000. I have been having trouble qualifying for a mortgage, and I do not understand why. The best place for us to start our discussion is with your taxes. How much are you trying to spend on a home, and how much income can we find through your tax returns. Do you also take W-2 income? There are certain items like depreciation or depletion that can be added back to income from your taxes; however. the biggest misconception is using gross income for self-employed borrowers. Also if your credit score is high enough, we can also look at our bank statement program, which would potentially increase your income level to one that might be more in line with your thinking.
Please feel free to contact me with any questions you might have. I look forward to working with you and your clients. Please remember, I am licensed in Virginia, North Carolina and Florida.
Jennifer Keenan, Sr Mortgage Consultant, NMLS# 101837
Tidewater Home Funding, 757-272-4199