U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
 
Old 11-29-2007, 01:50 PM
 
Location: Tijuana Exurbs
3,861 posts, read 10,091,894 times
Reputation: 4276

Advertisements

My sister wants to refinance and roll her HELOC and other debts into a new mortgage.

The Bad:

The resulting ratio of her new payment to her documentable income would be too high for the loan to be approved.

The Good:

Plenty of equity (even with the higher mortgage and lower appraisals of the current market, debt on the house would be under 60%)

Good credit score (700+)


Even if the Liar Loans were still out there the penalty interest rate and points would be unacceptably high. Is it possible to have a non-resident of the house who does have the documented income to 'co-sign' the new mortgage to make the debt to income ratio work without having to refi with a penalty rate and penalty points?

Would it be necessary to put the 'co-signor' on the title?

Does anyone have any other suggestion to work this problem in a way that would allow my sister to get a good interest rate and payment?
Quick reply to this message

 
Old 11-29-2007, 02:05 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,094,482 times
Reputation: 1007
she can state her income with that high score...and if the LTV is under 80% LTV.

they wont verify income....only employment.....and still go full documentation ..and still get a good rate


2nd option....lenders may allow non-occupant co-borrowers
Quick reply to this message
 
Old 11-29-2007, 05:23 PM
 
Location: Tijuana Exurbs
3,861 posts, read 10,091,894 times
Reputation: 4276
Unfortunately, my sister is self employed so there is no employer than can be checked. Do you know how that changes things?

Also, just to add this in, the new loan would be FHA conforming (under 417k), obviously a plus.

Regarding the lenders that may allow non-occupant co-borrowers, is that just something to bring up with the mortgage broker?
Quick reply to this message
 
Old 11-29-2007, 05:33 PM
 
Location: NC
1,264 posts, read 2,119,430 times
Reputation: 534
You say her ratio is too high? What is it?
Quick reply to this message
 
Old 11-29-2007, 06:55 PM
 
Location: Charlotte, NC
8 posts, read 30,404 times
Reputation: 12
1st of all, a co-signor does not have to be in title. Speaking as an underwriter, if the lender receives and approve thru automated underwriting system, LP or DU, then there is no worry with the hight ratio. However, if a co-signor is added you may have to document your sister's income via tax returns. There are also other ways to go stated income with validation of self employment. Keep in co-signor debts are included in ratios.
Quick reply to this message
 
Old 11-29-2007, 07:02 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,094,482 times
Reputation: 1007
self employed for more than 2yrs.....and DU will not ask for income verification.

FHA loans ONLY go up to 362k.

I think you meant conforming......conforming only goes up to 417k.

My bet is to run it full doc and the automated underwriting system wont ask for income verification. I just did one a few weeks ago on LP.
Quick reply to this message
 
Old 12-03-2007, 03:45 PM
 
Location: Tijuana Exurbs
3,861 posts, read 10,091,894 times
Reputation: 4276
Could someone tell me what "DU" stands for?

You are correct 0679, I meant conforming. By the way, the loan being refinanced would be a VA loan, but given that other debts would be rolled into it, I guess it would have to be refinanced as a conventional loan. Correct?

If the refi was run with full doc, won't the person processing the loan want the income verification?
Quick reply to this message
 
Old 12-03-2007, 03:54 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,094,482 times
Reputation: 1007
VA or gov't loans are not considered conventional mortgages.

They just raised the VA loan limit to 650k.

DU - Desktop Underwriter.
Basically a software that determines the strengths/weaknesses of a borrower by evaluating debt to income, ltv, assets, etc.

If it's a VA Loan they will most likely want to document EVERYTHING even if it doesnt call for it.

Regular conventional/conforming loans can bypass the income portion when the LTV is less than 80%..and a good credit score.

The DU/LP findings will have this written out that income can be stated..and only employment verification is required.
When I had a self employed borrower...they called the place of business...spoke to the secretary...and asked her how long the owner was an owner etc.


Quote:
Originally Posted by kettlepot View Post
Could someone tell me what "DU" stands for?

You are correct 0679, I meant conforming. By the way, the loan being refinanced would be a VA loan, but given that other debts would be rolled into it, I guess it would have to be refinanced as a conventional loan. Correct?

If the refi was run with full doc, won't the person processing the loan want the income verification?
Quick reply to this message
 
Old 12-04-2007, 01:04 AM
 
Location: Tijuana Exurbs
3,861 posts, read 10,091,894 times
Reputation: 4276
Thanks, 0679.

So, the existing VA loan will have to be converted in some way to a conventional loan, which given the 700+ credit score, and the 60% LTV seems doable. Or is taking out a conventional loan to replace a non-conventional loan require running through some extra processes? Otherwise, all that would seem to be necessary is to verify the employment, by calling the borrower's place of business and having someone verify that the borrower works there.
Quick reply to this message
 
Old 04-21-2009, 03:17 AM
 
Location: Huntington Beach, CA
2 posts, read 14,067 times
Reputation: 10
Please tell me what VA is ?
Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


 
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:
Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top