No income verification? (loan, sell homes, real estate, property tax)

[gentlearts]

I didn't know what to call the thread but the situation is..
We used to have a 6 figure income, but now we have a small salary plus commission. As a sales rep. my husband nurses clients along for months or years until the sale goes through. Anyway, we intend to downsize this year and put 50% down on a house. We have excellent, maybe perfect, credit, and other money in investments.
Will we be able to get a, no more than, $150,000. mortgage?

[TwiloMike]

Originally Posted by gentlearts

I didn't know what to call the thread but the situation is..
We used to have a 6 figure income, but now we have a small salary plus commission. As a sales rep. my husband nurses clients along for months or years until the sale goes through. Anyway, we intend to downsize this year and put 50% down on a house. We have excellent, maybe perfect, credit, and other money in investments.
Will we be able to get a, no more than, $150,000. mortgage?

No income verification has gone the way of the dodo. How much did your husband claim on his W-2 or 1099 last year? The year before? What is the value of the house you're looking to buy? You will be asked to provide tax returns as well.

[Daddys///M3]

Originally Posted by TwiloMike

No income verification has gone the way of the dodo. How much did your husband claim on his W-2 or 1099 last year? The year before? What is the value of the house you're looking to buy? You will be asked to provide tax returns as well.

I'm not sure, but I believe the OP was referring to a SIVA loan, which are still around. I believe you are thinking of a NINA, or no doc loan. I could be wrong though and if so, I apologize.

OP, if you are referring to a stated income loan please keep in mind that the purpose of a stated income loan is to state income that is received, but hard to document, not qualify based on a previous salary that no longer exists.

[TwiloMike]

Originally Posted by Daddys///M3

I'm not sure, but I believe the OP was referring to a SIVA loan, which are still around. I believe you are thinking of a NINA, or no doc loan. I could be wrong though and if so, I apologize.

SIVA is still around, yes, but priced pretty badly. I wouldn't take one if I didn't absolutely have to. You're right, though, I was think of a NINA.

[gentlearts]

I heard that nobody really cares what your numbers are as long as your credit history is excellent. We're talking going from a $450K house to a $225ish in our empty nest years. We're not 20, we're late 50's, so it's safe to assume our pattern of behavior is very predictable. We could pay cash if we wanted to, but we don't.

[TwiloMike]

Originally Posted by gentlearts

I heard that nobody really cares what your numbers are as long as your credit history is excellent. We're talking going from a $450K house to a $225ish in our empty nest years. We're not 20, we're late 50's, so it's safe to assume our pattern of behavior is very predictable. We could pay cash if we wanted to, but we don't.

In this market everyone cares about the numbers. It's great that you have a clean mortgage payment history and great credit but those aren't compensating factors: they're requirements. Income will be very important if you get a full documentation loan and that's the kind of loan most banks are actually willing to write. Stated income is unpopular and expensive.

[HappyNCGirl]

Originally Posted by gentlearts

I didn't know what to call the thread but the situation is..
We used to have a 6 figure income, but now we have a small salary plus commission. As a sales rep. my husband nurses clients along for months or years until the sale goes through. Anyway, we intend to downsize this year and put 50% down on a house. We have excellent, maybe perfect, credit, and other money in investments.
Will we be able to get a, no more than, $150,000. mortgage?

I want to throw this out there for you to consider....given the drastic change in income, could it be to your betterment to find a decent rental rather than sinking so much into a house?

Invest that chunk of money in something that will keep the money growing and working for you so that you have it to fall back on. Once you sink it into a house, its going to be nearly impossible for you to get it back without borrowing it back (provided the bank would even give you a loan) or without selling the house (dicey prospect at best for the next few years).

With your income down drastically, the mortgage deduction will not be of much value to you anyway. Then there is property taxes, insurance, home improvements and repairs....the expense just doesn't stop.

Don't get me wrong, I'm all about owning real estate. My husband and I own half dozen properties, and I sell homes for a builder. Recently though, I've learned some different ways of looking at home ownership. Mainly, how unwise it is to lock large chunks of money into the walls of your house (so to speak). Your $150,000 downpayment on a house will never amount to more than $150,000. A house financed at 100% appreciates at the same rate as one financed with 50% down.

With values going down, you very well could lose part of your downpayment if you needed to sell. With your income down, you could lose the entire amount if you had a financial crises and couldn't make the payment at all.

No, I would never finance 100% of the price of a house, but neither would I put such a huge sum of money into a rather risky investment when my income was so severely impacted.

Does any of this make sense? Just something to consider, or not, as you see fit

My income is straight commission, so I'm very sympathethic to your circumstances. Best wishes, hopefully our economy gets better sooner than later and things return to a more normal state!

[gentlearts]

Originally Posted by HappyNCGirl

I want to throw this out there for you to consider....given the drastic change in income, could it be to your betterment to find a decent rental rather than sinking so much into a house?

Invest that chunk of money in something that will keep the money growing and working for you so that you have it to fall back on. Once you sink it into a house, its going to be nearly impossible for you to get it back without borrowing it back (provided the bank would even give you a loan) or without selling the house (dicey prospect at best for the next few years).

With your income down drastically, the mortgage deduction will not be of much value to you anyway. Then there is property taxes, insurance, home improvements and repairs....the expense just doesn't stop.

Don't get me wrong, I'm all about owning real estate. My husband and I own half dozen properties, and I sell homes for a builder. Recently though, I've learned some different ways of looking at home ownership. Mainly, how unwise it is to lock large chunks of money into the walls of your house (so to speak). Your $150,000 downpayment on a house will never amount to more than $150,000. A house financed at 100% appreciates at the same rate as one financed with 50% down.

With values going down, you very well could lose part of your downpayment if you needed to sell. With your income down, you could lose the entire amount if you had a financial crises and couldn't make the payment at all.

No, I would never finance 100% of the price of a house, but neither would I put such a huge sum of money into a rather risky investment when my income was so severely impacted.

Does any of this make sense? Just something to consider, or not, as you see fit

My income is straight commission, so I'm very sympathethic to your circumstances. Best wishes, hopefully our economy gets better sooner than later and things return to a more normal state!

I get what you're saying, but we're pushing 60 and have been around the block a few times. We plan to get a modest house to be paid off within 5 years or so which is about the time we'll retire. It's not for the deduction. At this stage we just want a mortgage free house in the near future.
I don't mean we're destitute or anything, just more like 50K a year instead of 100+, and we fully expect the income to be back up in a few years, but I'm only willing to buy today based on now income, not potential income.
When we were young we bought all the house we could afford plus a little, which always paid off in a big way. Now we're just reaping those benefits to buy our last, or next to last houses, plus a bunch left over.