November 7th, 2014
- I have a note receivable as part of my income. My CPA has advised me to use the income as consulting income, it has more tax advantages. The note is for four years. What do you need from me on this? If the income is received as consulting income, this turns you into a self-employed individual. You would need 2 years of income to qualify. If this is a four-year note after two years of receiving it, we could not use the income because it would not continue for 36 months. A decision needs to be made with your tax preparer as to how exactly this income should be handled. If a true note receivable after 12 months of receipt you could use it as income, but your window is very small to accomplish.
- With our refinance, we are taking cash out to renovate our kitchen. We would like to go ahead an order the cabinets. We would use a local suppler who would put it on a credit account. Cabinets are about 4-5 weeks out. Can we go ahead and order them? The first thing we need to do is make sure your debt ratio is still in line. Next, you would need to immediately provide me with the terms of credit and statement, so we could include on your application. Even if the terms are 12 or 24 months interest free, there is still a payment at some point that needs to be considered. Once we update your information, the file has to go back through underwriting for approval. This is very important as the morning of closing a "soft pull" of credit is complete by compliance. Any inquiry must be addressed and any new debt must be included on your application. If you wait until the morning of closing to provide, closing could be delayed. Always best to be up-front about these things.
- Are there anymore 80/10/10 programs? Yes, there are. When looking at an 80/10/10, we compare both the rates on the first and second as well as traditional mortgage insurance at 90%. Many people do not like mortgage insurance, so we can also look at a lender paid mortgage insurance program. Lots of options!
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