What kind of income documentation do you need to provide in order to qualify for a mortgage? Lending requirements have changed at a rapid pace, largely due to a regulatory environment seeking to prevent a repeat of the real estate collapse. While it used to be good enough to state your income, regulations now require that income be “fully documented”. To clarify, here is a list of the forms of documentation that are used to verify income in the majority of mortgage qualification scenarios in 2015:
In areas like the San Francisco Bay Area, where median home prices tend to hover around the million dollar mark, mortgage loan amounts often exceed the conforming and high balance conforming loan limits (respectively, $417,000 and $625,500, in most local metropolitan statistical areas). The ability to offer well-priced, comprehensive jumbo loan programs to meet the needs of buyers in all the regions we service is a necessity here at RPM.
As of January 26 Fannie Mae will make their Collateral Underwriting (CU) tool available to lenders during the underwriting process. The announcement has elicited mixed reactions from industry experts. So what does it all really mean?
As the one year anniversary of the Qualified Mortgage (QM) loan guidelines approaches, the time is right to reflect upon the impact and the uncertainty of QM vs. non-QM loans. We have spent the past year working with QM loans and developing smart solutions beyond QM to serve more borrowers. The non-QM terminology lends itself to the perception that a loan and/or borrower is somehow inferior to one who is “qualified.” As a result, there is skepticism, uncertainty and fear associated with “non-QM,” which is misguided.
As former Fed Chairman, Ben Bernanke, recently found out firsthand, the mortgage process can be complicated and unforgiving. But when it comes to the credit report, are there still options to correct and improve initial findings so the end result might be loan approval or a better interest rate? Absolutely. One of the ways we accomplish this re-evaluation of the credit score is through a process known as a rapid rescore.
Here at RPM, we see a fair amount of high loan-to-value mortgage scenarios – meaning lower down payments with more borrowed from the lender. It’s because the real estate values in our service areas tend to be high and it can take a while for buyers to save the funds needed to purchase a home. So 10% down payments (or even less) are not uncommon and we see them across the borrowing spectrum, from the conforming range (below $417,000) all the way to homes exceeding $1 million. Some buyers also need a boost in their income to be able to meet the debt-to-income ratio requirements to qualify for a loan.
We asked our Chief Credit Officer, Gary Scoma, to break it down for us.
FICO is the most widely used credit score. The three major credit repositories, Equifax, Experian and Transunion, work with FICO to develop their scores. But, when it comes to mortgages, FICO is the only credit score that is considered. So, when FICO recently announced it was changing its scoring system, the resulting headlines caused some confusion and debate. Will FICO’s decision to recalculate credit ratings be a boon for the mortgage industry? Some say the changes will not impact consumer credit in any meaningful way. So, what’s the real story here?
If you follow the news surrounding the housing market, you know that the reluctance of millennials to purchase homes has been a contributing factor for holding back economic recovery. New to the world of real estate, millennials face financial challenges that are magnified by factors such as student debt, a tough job market and a lack of credit history to qualify for loans. The vision of a dream home is often more grand than their budget reality.
For successful real estate agents, a certain portion of their referral business comes from the financial advisors with whom they have built trusted relationships. Financial professionals call on agents first when they have clients who need help with real estate, and there are three key reasons why they want agents to work with RPM:
When purchasing a home, a question or concern that comes up either occasionally (or frequently, as the real estate market might dictate) is, “What happens if my appraisal comes in low?” So let’s take a look at the relationship between purchase price and appraised value while also providing some insight into your mortgage options should this dilemma befall your home financing experience.