Forum Replies Created
-
Gustan
AdministratorAugust 30, 2024 at 11:05 pm in reply to: MEET CHASE-THE LONG-COAT GERMAN SHEPHERDOne thing about Long-Hair GERMAN SHEPHERD dogs is they shed
I am brushing him every other day. Chase is so darn spoiled. He knows how to play me, and he always wins. I got him a new identical red ball, but he doesn’t want anything to do with it. He still wants his ragged old red ball. Stubborn as a mule.
-
Gustan
AdministratorAugust 30, 2024 at 11:00 pm in reply to: MEET CHASE-THE LONG-COAT GERMAN SHEPHERD -
Gustan
AdministratorAugust 30, 2024 at 3:03 am in reply to: How Underwriters Calculate Borrowers Debt To Income RatiosUnderwriters look at borrowers’ debt-to-income (DTI) ratios to determine if they can repay the loan they are applying for. There is the front-end and back-end debt-to-income ratio. The front-end debt-to-income ratio is the cumulative housing payment (PITI) divided by the borrower’s monthly gross income. The back-end debt-to-income ratio is the cumulative housing payment which is the principal, interest, tax, and insurance (PITI) divided by the borrower’s gross income.
To make it convenient for our viewers, I posted the link to our online mortgage calculator with debt-to-income feature:
https://www.gustancho.com/best-mortgage-calculator/
gustancho.com
Best Mortgage Calculator | PITI, PMI, MIP, and DTI
We are at Gustan Cho Associates, You easily check your mortgage eligibility with the best mortgage calculator With PITI, PMI, MIP, HOA, and DTI.
-
Once a borrower has been discharged from Chapter 7 Bankruptcy, the waiting period for them to qualify for a jumbo loan can differ. However, most lenders typically impose a longer waiting period for jumbo loans than for conventional loans since the risks are greater to them. This is what you would usually get:
Typical Waiting Period for Jumbo Loans
- 4 to 7 Years: In most cases, the waiting period imposed on most borrowers who have had their Bankruptcy discharge under Chapter 7 before applying for the jumbo loan is between 4 and 7 years.
- 3 Years (Rare Cases): Some lenders might approve you for a jumbo loan if you wait just about three years after filing a bankruptcy discharge.
- However, you will need strong credit, significant proof of cash reserves, and a regular job with some stability.
Factors That Can Influence Approval
- Credit Score: Reestablishing strong credit is crucial.
- Lenders generally expect a minimum score of 700 and above.
Down Payment:
- Your down payment of $300,000, which represents 25% of the total purchase price of $1.2 million, is a good aspect to your advantage.
- It helps negotiate the length of the waiting period or the loan status.
Income and Employment
- As you stated in your digital media marketing consultant position, your income is stable and high, accelerating your eligibility for jumbo loans soon.
Steps to Improve Your Chances
- Shop Around: Don’t lower your standards for one particular lender.
- This is because some lenders have weaknesses that others do not.
- Other lenders may be accommodating in light of your positive financial standing.
Consider Alternative Loan Products:
- However, you may take up a non-QM loan.
- There is no waiting period after bankruptcy for non-QM loans.
- Mortgage underwriters are different in that they want to make the deal work.
- Its waiting periods for bankruptcy and low credit scores are lenient on non-QM Jumbo Loans.
- A 10% to 30% down payment is required on non-QM jumbo loans.
- There are dozens of non-QM jumbo loan programs, such as bank statement loans, DSCR loans, no-doc loans, asset-depletion loans, P and L Statement Jumbo Loans, stated income loans, and dozens of other creative funding products.
Please consult with a Mortgage Broker: It will be difficult to find lenders after bankruptcy, but a jumbo loan extension broker may know such lenders.
Though it is common to wait for around 4 – 7 years after Chapter 7 Bankruptcy Bankruptcy before applying for a jumbo loan, given your deep concerns about fast filing this loan level, you may even qualify faster if good deals are found.
-
Gustan
AdministratorAugust 30, 2024 at 12:48 am in reply to: Renting Existing Home and Buying New HouseObtaining a Second Home Loan after a Chapter 7 Bankruptcy Discharge
The waiting period to be eligible for a second home loan after a Chapter 7 Bankruptcy discharge depends on the type of loan you’re applying for. Government-backed and conventional mortgage loans require a mandatory waiting period after Chapter 7 Bankruptcy. Non-QM loans are alternative lending options with no waiting period after Bankruptcy. However, borrowers need a 10% to 30% down payment on non-QM loans.
FHA Loan:
- HUD, the parent of FHA, requires a 2-year waiting period from the date of discharge.
- Re-established credit and no late payments or derogatory credit tradelines after discharge.
VA Loan:
- It often takes two years after discharge.
- Re-established credit and no late payments or derogatory credit tradelines after discharge.
- If the borrower had extenuating circumstances that led to filing bankrupty, that would be considered under manual underwriting.
Conventional Loan:
- There is a waiting period of around four years after Chapter 7 discharge.
- Re-established credit and no late payments or derogatory credit tradelines after discharge.
USDA Loan:
- The waiting period is about three years after the discharge.
- Re-established credit and no late payments or derogatory credit tradelines after discharge.
Effect of Converting House #1 into a Rental Property on DTI Ratio: Converting your first house into an investment property may positively change your DTI ratio. This will be based on the following scenario:
Rental Income Consideration:
- Most lenders will allow you to use up to 75% of the mortgage of House #1.
- Instead, use its rental income to help reduce your DTI.
Lender’s expectations and requirements regarding rental income
Documentation Required:
- Rental income is included as income.
- Thus increasing the borrower’s DTIs.
- To do this, lenders usually combine a DTI assessment with an appropriate appraisal—a signed lease agreement.
- Such proof could be received as certificates for the security deposit and the first month’s rent.
History of rental deductions on income taxes (if present): Is It Necessary to Locate a Tenant First?
Finding a Tenant First is Ideal:
- The tenant must be in place for the rental income to manifest in your DTI calculation.
- Lenders will need a lease submitted with all the signatures from the parties supposed to sign and rental payments.
Vacancy Consideration:
- Such assumptions are made.
- This is because if you do not locate a tenant in time, the lenders, for instance, may disallow you to factor in the expected income from the property into the DTI calculations.
- This would hinder your ability to qualify for another mortgage on a second property.
In other words, the time one has to wait to qualify for a second home loan after being released from Chapter 7 Bankruptcy is loan-type dependent. Renting out your first home will decrease your DTI ratio, assuming you have a tenant or tenant’s undertakings. Getting a tenant before applying for a second home loan is better to increase the chances of getting it.
-
It’s one thing to go through a Chapter 7 bankruptcy discharge and start the mortgage application process again, but certain conditions or time limits must be observed depending on the type of mortgage one is seeking. Here are some brief descriptions of each type.
Waiting Periods After Discharge:
- FHA Loans: 2 years from the date of the discharge.
- VA Loans: 2 years from the date of the discharge.
- USDA Loans: 3 years from the date of the discharge.
- Conventional Loans (Fannie Mae/Freddie Mac): 4 years from the discharge date.
- Non-QM Loans: No waiting period after bankruptcy but requires at least a 20% down payment.
Note that all the above waiting periods may be waived occasionally if there are “extenuating circumstances” for which the bankruptcy may be justified.
Credit Score Requirements
FHA Loans: 580 is acceptable, but a mortgage lender can have lender overlays on credit scores and may ask for higher credit scores.
VA Loans: No such requirement exists, but mortgage lenders usually want at least this figure.
USDA Loans: There are no minimum credit score requirements. However, most lenders have overlays on credit scores for USDA loans and may require a credit score of 640.
Conventional Loans: Fannie Mae and Freddie Mac guidelines on conventional loans require a minimum credit score 620.
New Credit: Prove that credit has been responsibly utilized after the bankruptcy.
Employment: I have been in employment for a minimum of two years.
Down Payment: HUD requires a 580 credit score for a 3.5% down payment for a home purchase FHA loan.
Down Payment on VA Loans:
Zero down payment required. Lenders offer 100% financing on VA loans. VA loans have no maximum debt-to-income ratio as long as the borrower has strong residual income.
Down Payment on USDA Loans:
There is no down payment required. Lenders offer 100% financing on VA loans. The maximumThe maximum debt-to-income ratio is 29% front-end and 41% back-end.
Down Payment on Conventional Loans:
Down payments on conventional loans range from 3 percent to 20 percent, depending on the nature of the program under consideration.
Debt-to-Income Ratio on conventional loans is capped at 50% DTI.
No New Delinquencies Except for bankruptcy discharge. The applicant must NOT have any derogatory credit after bankruptcy discharge.
Explanation Letter: A few lenders might ask for a letter stating why a particular borrower has a history of filing for bankruptcy.
Housing Payment History: If you rent out accommodation, records of rent repayments may be of value.
Saving/Reserves: This shows that there is a capability to save and stand after the stroke of bankruptcy. These documents support bankruptcy discharge papers provided when such discharge occurred. Additional Considerations Manual Underwriting:
Compensating factors are positive factors of the borrower, such as a higher down payment, reserves, other income seasoned at least one year but not used as qualified income, and other positive factors that lower the lender’s risk. Re-establishing credit after the bankruptcy discharge is a big compensating factor. A payment shock of five percent or less is another big compensating factor.
-
Gustan
AdministratorAugust 28, 2024 at 11:07 pm in reply to: Need Help Understanding VA Loan Requirements and How to Obtain a COEGreat article, Chad Bush. Angie Torres @Angie_Torres will chime in on this thread and advise us on the real deal. Also, GCA has so much to offer our veterans. We can go down to credit scores down to 500 FICO. We have no debt-to-income ratio caps as long as the borrower has sufficient residual income. Anyone with higher rates, we can do a VA streamline refinance (VA IRRRL) and close in about a week or even sooner. Veterans with a COE has so many benefits. You as a veteran with a COE should try to get a four-unit multi-family home and one year later, use your VA again and get yourself a single-family home. Thank you for your service, Chad. Now I need to show you extra respect. Lol. Do you know the exact parameters on how you become eligible for a Certificate of Eligibility. My son Tim is a E-5, a drill sergeant, but is on the reserves. I think he served for six or seven years but never went to combat. How do soldiers on the reserves qualify for a COE.
-
Thank you for your insights into the current market conditions. Especially in the automobile industry.
- The Joe Biden and Kamala Harris Administration’s priority and goal is to make the economy look better than what it is.
- Inflation numbers are higher than the government reports.
- Unemployment numbers have been misreported and shorted by 818,000 people.
- The state of the economy is of the utmost importance if the Democrats want to win and clinch the Presidency and majority control over the U.S. Senate and Congress.
- We care about how the economy is performing.
- As much as we should not make any hearsay political statements or forecast the economy, we can state facts and try to provide some context to the issues highlighted above:
Auto industry pain points:
- It has indeed been documented that a certain population has experienced difficulties in servicing motor vehicle loans.
- Due to the sluggish economy, we have a higher incidence of motor vehicle repossession in some regions.
- One in five people needs help getting approved for auto financing.
- An alarming rate of auto repossessions is being reported month after month.
Interest rates:
- Car loan rates, in particular, have been on a worrying rise.
- This does not help consumers fund vehicles.
- Average interest rates on car loans are between 7% and 12% for consumers with great credit and high credit scores.
- Consumers with fair to good credit pay interest rates between 12% and 25%.
- The average new monthly car payment is between $1,000 to $1,800.
- Many people need help to afford their car payments due to the high cost of living, inflation, and home prices.
Loan approvals: Some borrowers also find it difficult to obtain vehicle loans because of negative reporting.
Vehicle preferences:
More customers preferred vehicles that were deemed more efficient within different parameters. These include, but are not limited to, fuel prices and the state of the economy.
Inventory levels: Inventory status also differs by manufacturer and geography.
Economic outlook:
- There can be all types of predictions.
- When it comes to the state of the economy, predicting things is more challenging than it seems.
- It is important to point out that a certain economic indicator is only sometimes simple and unambiguous.
- Different sectors of the economy are likely to be in recession while others are booming.
- The range of experience among individuals can be widely varied.
Reviewing economic literature and reports from different sources can help one inquire into the latest context and nuanced economic parameters. This may provide a more complete picture of the present economic environment and what the future may hold.
If the developments affecting the economy worry you, especially regarding how such factors will shape your finances, consulting a financial advisor may assist you. The advisor will take into account your particular factors and advise accordingly.
-
Gustan
AdministratorAugust 30, 2024 at 11:10 pm in reply to: Need Help Understanding VA Loan Requirements and How to Obtain a COEThank you Chad.I appreciate you. I will address this to Tim.
Social Media Links