I have clients who are buying a rental property or who are buying a primary residence and already own rental property and think they need to provide a copy of a current lease for the rental property as part of the loan application. But, that is not always the case.
The borrower may be able to document rental income by providing tax returns, rather than leases. In either a purchase or refinance the borrower should have a history of renting property. If the request is for a refinance, the borrower needs to have owned the property long enough to qualify for this option, typically a 2 year history is needed.
If the request is for a loan to purchase a new rental property, then having existing rental property with a 2 year track record income may allow them to use the tax return option.
If the borrower does not have a history of renting the subject property or if the borrower’s tax returns do not reflect the accurate income or expenses, then a mortgage lender may require one of two things: Read the rest of this entry »
Tags: mortgage, rental income, underwriting
Posted in Home Buying Process, Loan Process, mortgage, Underwriting Rules | No Comments »
A VA loan is a mortgage loan guaranteed by the Veterans Administration. There are numerous mortgage guidelines for a VA mortgage. I wanted to list some of the more important ones below, but you always need to speak to an experienced mortgage loan officer and have them discuss your specific circumstances as there are many other things to consider in addition to the below. Read the rest of this entry »
Tags: va loan guidelines, VA loans, VA mortgages, veterans administration
Posted in Loan Types, mortgage, Underwriting Rules | No Comments »
Jumbo mortgage loans are usually confusing to the average mortgage consumer. No one seems to know what defines a Jumbo mortgage loan, and no one realizes that there can be different underwriting guidelines for Jumbo mortgage loans than for non-Jumbo (also called Conforming) mortgage loans.
Jumbo loan amounts may vary county by county.
It is first important to know that there can be three different loan amount categories. There are:
- Conforming loans, which in 2019 go up to $484,350
- Conforming “High Balance” loans, which can go from $484,351, to as high as $726,525 if you are in a high cost area.
- Jumbo loans (also called Non-Conforming loans) are loans higher than the county Conforming loan limit.
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Tags: Jumbo, Jumbo loans, Jumbo mortgage, Jumbo mortgage guidelines
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Here at Capital Bank Home Loans we have a new dynamic loan application that we use. Being dynamic means that it can potentially verify your assets and income during the application process, allowing you to avoid having to upload any documents. And of course we all love to avoid paperwork!
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Tags: mortgage application, pre-approval
Posted in Loan Process, mortgage, Refinance, Sales, Underwriting Rules | No Comments »
When is an approval really an approval? When is an approval only a conditional approval? Below are the different levels of “loan approval” you can get for a mortgage:
1. Pre-Qualification:
This is done before you make an offer on a home. This is only a loan officer analysis, and supporting financial documents are not required. This is a review of the applicant’s income and debts using standard methods of determining housing and debt ratios to indicate the maximum loan amount for which an applicant would qualify, subject to the satisfactory appraisal, further verifications of income, employment and credit history. This is the lowest form of analysis you can have done.
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Tags: approval process, mortgage approval, pre-approval, pre-qualification
Posted in Home Buying Process, Loan Process, mortgage, Underwriting Rules | No Comments »
When you’re ready to buy a new home, one of the first things you have to do is take steps to get your financing in place. Mortgage approval is based in part on an automated underwriting process. Unless you plan to pay in cash, you need to secure a mortgage loan. It is beneficial to get a pre-approval letter from a mortgage lender before you even make an offer. Having your loan pre-approved can show a seller you are a serious buyer with adequate funds. You can also reduce the risk of the contract falling through.
Lenders typically use one of two underwriting processes for mortgage loans: automated and manual. Understanding the basics of how these types of loan approval work can give you confidence when applying for your mortgage. Read the rest of this entry »
Tags: Automated Underwriting, loan approval, manual underwriting, pre-approval, underwriting
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Today’s real estate market can be competitive for everyone, no matter what price point you’re shopping at. That’s why it’s important to understand the ins and outs of the home buying process before you hit the market. Let’s talk about what getting a mortgage pre-approval letter involves, how you can do so, and why it’s a good idea for anyone heading into the market for a new home. Read the rest of this entry »
Tags: home buying, pre-approval, pre-qualification
Posted in Loan Process, mortgage, Underwriting Rules | No Comments »
Homeownership is a major component of the American dream as it provides you with your own piece of property to put down roots and live your life. You might think the process starts when you first go out hunting for houses or condominiums, but it often begins long before the initial meeting with a realtor when you contact a lender for pre-approval. Homes are major purchases, and it’s understandable that you have to meet certain qualifications before the transaction goes through. Here are a few reasons why the seller and realtor might want you to get pre-approved, as well as an overview of the entire process. Read the rest of this entry »
Tags: homebuying, pre-approval, pre-qualification
Posted in credit, Home Buying Process, Loan Process, mortgage, Underwriting Rules | No Comments »
When you’re beginning the home-buying process, figuring out what you need to get your mortgage loan can seem complicated. You may even be tempted to find your dream home first before you apply for a mortgage. However, going through the pre-qualification and pre-approval processes at the start of your search can make the entire experience go more smoothly.
Before you meet with a lender or mortgage broker, you should have a good understanding of how the loan process works and what you’ll need to provide in your application. This guide covers the basics of loan application, qualification, and approval. Read the rest of this entry »
Tags: homebuying, pre-approval, pre-qualification
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I constantly get questions about whether or not someone who is self-employed needs a minimum of two years of tax returns, or if they can get away with one year of them, when qualifying for a mortgage. I thought I would answer this question and put it to rest. Please realize guidelines can change in the future. As of the date of this blog, the hyperlinks below are guidelines related to the history that self-employed people need, and the number of years of tax returns they need to document their income. Read the rest of this entry »
Tags: mortgage guidelines, mortgage qualifications, self-employed, underwriting guidelines
Posted in Loan Process, mortgage, Underwriting Rules | No Comments »
