If a condominium has litigation against it, to get a loan approved there are certain things a mortgage lender has to document or the loan may be denied.
A mortgage lender has to prove that the litigation has no impact on the safety and structural soundness of the condo.
And the insurance carrier that insures the condominium building has to have agreed to provide the defense, and the amount of the litigation must be covered by the HOA’s insurance.
There are other reasons why litigation against a condominium may not be an issue, such as:
- It is non-monetary litigation including, but not limited to neighbor disputes or rights of quiet enjoyment;
- the HOA is the plaintiff in the litigation and not the defendant;
- the reasonably anticipated or known damages and legal expenses are not expected to exceed 10% of the project’s funded reserves.Financing a condominium can be tricky for other reasons. Mortgage guidelines have the ability to change at any time, so always talk to a well-reviewed mortgage loan officer to make sure you understand the current guidelines and how they might apply to you.
Tags: condo litigation, condo loan, mortgage underwriting
Posted in Condo, Home Buying Process, Loan Process, mortgage, Underwriting Rules | No Comments »
When calculating a student loan payment on a VA loan there are various rules to pay attention to as far as what monthly payment is counted on that student loan debt.
If written evidence shows the student loan debt will be deferred at least 12 months beyond the closing date, no monthly payment is counted.
If a student loan is in repayment or scheduled to begin within 12 months from the date of a VA mortgage loan closing, the lender must consider the anticipated monthly payment in calculating the debt-to-income ratio. A payment is established by calculating each loan at a rate of 5% of the outstanding balance divided by 12 months. Read the rest of this entry »
Tags: school loans, student loans, VA loans, VA mortgages, VA student loan debt
Posted in Underwriting Rules, VA Mortgage | No Comments »
With the popularity of electric cars and solar panels increasing, it’s important to point out that having solar panels on your house may impact your ability to get a mortgage. Many times, buying solar panels will be financed, and that is what they have an impact on your ability to purchase or refinance a mortgage. Read the rest of this entry »
Tags: mortgage, solar panels, underwriting
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A limited review condo approval means that when you get a mortgage to purchase a condominium you don’t have to go through the normal extensive document review to approve the condominium. You must have an approved condo to get a mortgage approved to buy a unit in the building. The approval review is more limited/abbreviated with a limited review condo approval. Read the rest of this entry »
Tags: condo approval, limited review condo approval, mortgage approval, mortgage underwriting
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I sometimes have people ask me what the requirements are to count alimony or child support income towards qualifying for a mortgage.
First we need a copy of a divorce decree or separation agreement (if the divorce is not final) that explains all the terms of any alimony and child support, and any other financial arrangements that may have a positive or negative impact on your mortgage application.
In general, we have to review the payment history to determine if it’s been stable income for the borrower. We have to document no less than six months of the borrower’s most recent regular receipt of the full payment. Read the rest of this entry »
Tags: alimony, child support, loan approval, mortgages, qualifying
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Every year, the Federal Housing Finance Agency (FHFA) sets a dollar cap on conventional mortgages that Freddie Mac or Fannie Mae are allowed, commonly referred to as a conforming loan limit. In 2020, the conforming loan limit for a single-family home was $510,400. This year, the conforming loan limit for a single-family home increased to $548,250, nearly 7.6% higher!
This means Freddie Mac or Fannie Mae can purchase conventional loans valued at or under the conforming loan limit from mortgage lenders. In most areas, the maximum conforming loan limits are as follows: Read the rest of this entry »
Tags: loan amount, loan amounts, loan limit, loan limits, maximum mortgage, mortgage limits
Posted in Home Buying Process, Loan Types, mortgage, Refinance, Underwriting Rules | No Comments »
When you qualify for a mortgage loan, it may not be for the amount you want. Outstanding debts can affect how much you are able to borrow. But in some instances, you may be able to pay off the debt in order to qualify for a larger loan.
If you reduce the number of installment payments to 10 or fewer, the loan may not be included in your debt-to-income ratios. However, if the debt requires a large monthly payment, an underwriter may consider it a risk in your debt-to-income ratio. Read the rest of this entry »
Tags: debt paydown, debt payoff, debts, mortgage approval
Posted in credit, Home Buying Process, Loan Process, mortgage, Underwriting Rules | No Comments »
What is a community property state?
In the U.S., nine states have tried to alleviate the pressure of divorce by passing community property laws.
In Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, community property laws require divorcing couples to split assets acquired during a marriage equally. Marital property includes earnings, all property bought with those earnings, and all debts accrued during the marriage.
When getting a mortgage in a Community Property State, a spouse might not be on the new mortgage but their credit report will still be pulled and their debts will be added to the debt-to-income ratios of the mortgage borrower. However, this only applies to FHA & VA mortgages taken in the above states, not on Conventional loans. Read the rest of this entry »
Tags: community property, divorce, FHA loans, VA loans
Posted in FHA, Home Buying Process, Loan Process, Underwriting Rules, VA Mortgage | No Comments »
If you have variable income that changes and fluctuates, the rules of assessing your income to qualify for a mortgage are different than if you had a fixed salary.
Some types of variable income would be: Read the rest of this entry »
Tags: mortgage guidelines, qualifying income, variable income
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Mortgage lenders are now required to confirm that you are still employed prior to closing on a mortgage, three business days prior in fact. Mortgage lenders are always required to verify that a borrower has not lost their job, been furloughed, laid off, or had their income altered prior to closing because it impacts their ability to repay the loan. Previously, lenders were able to document a borrower’s employment 10 calendar days prior to settlement. Read the rest of this entry »
Tags: covid, Verification of employment, VOE
Posted in mortgage, Refinance, Underwriting Rules | No Comments »
