Loan Officer Gustan Cho
Loan OfficerForum Replies Created
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Thanks for giving me more details about your situation. I appreciate it. Concerning the Prop 19 tax basis and its effect on qualifying for a loan, it is indeed difficult for lenders who only calculate property taxes using the standard method, given that you prefer working with local lenders.
Things to consider:
Advantages of Proposition 19:
It enables homeowners, especially those who are elderly and over fifty-five years old, to transfer their previous homes’ tax assessments to new properties. Thus, it saves a lot of money in terms of property taxes. However, most lending institutions estimate future financial obligations at one point two five percent (1.25%) regardless of whether there exists any conservative guesswork, like what just happened to you.
Lender’s flexibility:
Some may be willing to qualify borrowers based on lower anticipated property taxes under Prop 19, though this rarely happens. This is because lenders normally use current rates, which apply universally, without considering individual differences among applicants to not underestimate their clients’ financial capability in the coming days.
Other Solutions:
If they are already your trusted partner and you want convenience, go ahead. However, remember that things have been done, and when everything is adjusted according to Prop 19 rules, your actuals will likely turn out lower than expected. The deal now would ensure it will close while benefiting from reduced levies later.
Out-of-state lenders:
Alternatively, if you were to consider another lender outside their region who might have had prior experience dealing with similar cases or could be more open-minded regarding qualification criteria based upon proposition number 19, however, as mentioned earlier, starting afresh by filling out applications, forms, etc., with different people takes time and only sometimes yields the desired results. Hence, one may try many options but return where they started.
With everything being as it is and given that you would rather stick around with a local lender than look elsewhere. This is to keep an open mind even if they make no allowances due to adjustments arising from Proposition 19. I am in charge of the largest branch of NEXA Mortgage Corporate NMLS 2315275, the largest mortgage brokerage in the nation, licensed in 48 states (M.A. and N.Y. pending), including Washington, DC, Puerto Rico, and the U.S. Virgin Islands. Over 80% of our borrowers could not qualify at other mortgage companies. Gustan Cho Associates (Oakbrook Terrace, Illinois NMLS 2315275) is a DBA of NEXA Mortgage. Most of my support, operations, and licensed personnel are seasoned professionals who have been with me for over a decade. We only issue pre-approvals if we can close the loan on time. I am one of the few national managing mortgage branch and ops managers who originate loans. We have many different options such as a TBD underwriting approval, a full mortgage conditional loan approval subject to the property. We offer forgivable down payment assistance programs, no-doc loans, bank statement loans, and other alternative mortgage programs. Let’s chat on the phone, and if I can offer any advice that can benefit you, I want you to choose any loan officer and mortgage lender you feel comfortable with. There were many instances where I have helped clients who had other loan officers coach their loan officer to the finish line. The housing market is tough right now to sell, considering what you pay for the mortgage. Moving with certainty about loan conditions and general financial status would be wise.
If you ever decide otherwise or need more help, feel free to let me know. I hope this has been helpful. Good luck with your decision-making process. Have a nice weekend!
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I understand California’s Proposition 19 and how it affects property taxes. California’s Proposition 19 is mainly for seniors 55 and older. What Proposition 19 does is it allows homeowners who qualify to transfer the taxable value of their existing home to a replacement residence. This can result in significant tax savings on a new purchase. And yes, this reduction in property taxes can bring down your DTI ratio, which is vital while trying to get approved for a loan.
You are correct about grossing up non-taxable Social Security income. HUD guidelines on FHA loans allow lenders to add 15% to non-taxable income, increasing your qualifying income. For example, if one-third of your Social Security income is not subject to tax, that portion can be grossed by 15%, thus helping the overall numbers.
As for your last question, yes, the home you buy must meet HUD agency guidelines criteria, including property condition standards (minimum property requirements). The house must undergo an appraisal that includes an inspection (to ensure it meets safety/soundness/security requirements).
If you’re considering Prop 19 and grossing up Social Security to qualify, you must find a lender who understands how these two things work together within underwriting guidelines. Let me know if you’d like to talk more next week, and we can discuss further options. We have over 250 wholesale investors and financial institutions.
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An FHA loan may be a good choice in your condition as it allows for higher debt-to-income ratios than conventional loans. Here are some points to note:
FHA Loan DTI Limits: You can have a maximum of up to 46.9% front-end and 56.9% DTI back-end according to typical FHA guidelines (including both front-end and back-end ratios). This is very appropriate in your case because you possess high credit score points alongside a large down payment.
Compensating Factors: Your good credit scores, clean credit history, and ability to put down 50% are strong compensating factors that allow the lender to approve your loan request even with higher DTIs.
Manual Underwriting: Depending on how strict or flexible a particular lender may be regarding their standards, where an applicant’s debt-to-income ratio surpasses this limit through auto-underwriting, manual underwriting could push it over further.
Alternative Options: Other non-QM loans apart from FHA can also work. Non-loans sometimes provide more leniency around DTI ratios but usually come with higher interest rates attached to them. Bank statement loans go off monthly bank deposits with no income documentation required. Bank statement loans are for self-employed borrowers. The past 12 months of bank statement deposits are averaged, and the average is used as the qualified income.
You should discuss this matter with any mortgage lender who will review all your financial details before suggesting what they think is best for you. Gustan Cho Associates has no lender overlays, and we can push it to the maximum allowable debt-to-income ratio cap. Remember that since you’re planning on paying fifty percent upfront and currently boast stellar credit scores, finding such lenders shouldn’t be difficult—they might just accept working around higher debts/incomes anyway!
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Took babies out grocery store shopping. They bought squash, and they thought it was their toys
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Yes, credit report judgments can be removed, but they are on a case-by-case basis. Below are steps to help you. However, if the judgment is valid and you get it removed from your credit report, it will be discovered when you apply for a mortgage loan. Judgments are public records. Lenders will run a tri-merger credit report when you apply for a mortgage. Initially, lenders will go off the credit tradelines and other data that report on the tri-merger credit report. However, as the loan application proceeds through the mortgage process, mortgage underwriters will order a third-party public records report on all borrowers. This means public records that do not report on credit reports will be discovered with the public records background check. A public records discovery of a judgment must be addressed before the mortgage process proceeds.
Check the Accuracy of the Judgment
Firstly, look for mistakes in your credit records regarding judgments. Examples include wrong amounts, dates, or whether they should no longer be included in your report. If any inaccuracies are found, these errors can be disputed with bureaus, and if successful, this might lead to the removal of the judgment.
Dispute with Credit Bureaus
When judgment is incorrect or does not belong to you, you file a complaint against that particular item at all three major national consumer reporting agencies, Experian, TransUnion, and Equifax, responsible for keeping records about an individual’s borrowing history. The agency will conduct investigations into disputed items, during which they must verify everything within one month, so failure on their part would mean always deleting such information from your record.
Negotiate a Settlement
If it turns out there was indeed a valid judgment against you, then try negotiating with creditors to settle the debts owed by coming up with some agreed payment plan over a certain period, after which you may request filling out a satisfaction of judgment form through the court clerk’s office, followed by notifying relevant bureaus update reports showing either satisfaction or total deletion thereof depending on circumstances having been met.
Vacated Judgments
Whenever a court overturns its decision regarding any case, including those related to debt collections, known as vacating judgment orders, forward copies reflecting this new development alongside a cover letter stating reasons why I should remove such details from my file straight away, just like they never existed before, thus leading towards their eventual erasing completely.
Credit Repair Companies
Though they cannot promise a 100% success rate in getting rid of legal judgments passed against someone, their assistance might still prove critical, especially where dispute resolution becomes tricky. Hence, it is advisable to seek help from reputable firms who abide by CROA rules throughout all interactions between parties involved at different stages during the entire process.
Important Note:
In 2017, credit reporting agencies stopped including judgments on credit reports due to changes in federal law. This means that if a judgment appears on your report, it is likely because the creditor or credit bureau made an error or used older reporting methods.
Impact on Mortgage Qualification
Removing a judgment from your credit file may improve your chances of qualifying for a mortgage. This will raise your scores, reducing the lender’s perception of your riskiness when lending money. However, if the judgment that has been deleted is still valid, then it will get discovered when the mortgage underwriter does a national third-party public records background check. As we covered earlier, a deleted public record such as a judgment will get discovered by mortgage lenders and needs to get addressed before the mortgage loan process continues.
It is always best to consult with professionals like attorneys specialized in finance matters or certified credit counselors before taking action. They can provide guidance tailored to individual circumstances, thus ensuring a positive outcome.
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More pictures and videos of Chase.
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When you buy a new manufactured home with land and construction using FHA-insured financing, specific HUD guidelines must be followed. Here is a summary:
HUD Guidelines for New Manufactured Homes with Land and Construction:
Eligibility Requirements:
Property Standards: The manufactured home should meet HUD’s minimum property standards, which include being permanently attached to a foundation that meets FHA requirements. The foundation must also comply with the Permanent Foundations Guide for Manufactured Housing in HUD Handbook 4930.3.
Manufactured Date: The house must have been constructed on or after June 15th, 1976, and bear a HUD Certification Label affixed to it somewhere (“HUD tag”) stating compliance with HUD Code standards.
Primary Residence: Borrower must use this property as their primary residence.
FHA Loan Types:
FHA Title II Loan (Single-Family Housing): This loan can be used to purchase both the manufactured home and the land on which it sits. However, the house has to be placed on a permanent foundation and classified as real estate.
FHA Title I Loan: This loan is commonly used to buy only the manufactured home without any land involved in the transaction, though less frequently than when land is included.
Combination of Land and Home:
Suppose you’re buying new land and your new manufactured home at once. In that case, loans must cover both these things by financing the acquisition cost of real estate and the costs related to building on permanent foundations. So before closing deals, houses should be fixed onto lands bought together into one parcel.
Construction Standards:
You must use brand-new, never-occupied mobile homes that are built according to local zoning laws and lot size restrictions and placed on lots meeting community development ordinances.
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Here are more pictures of Chase.
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Whether a mortgage can be obtained with a judgment against someone depends on several things. Here are some possibilities:
Getting a mortgage with a judgment:
Though possible only if you paid the judgment, settled with the judgment creditor, or have a written payment plan with the judgment creditor, it’s not easy to do. Most lenders see judgments as a major derogatory item. Applicants with judgments may be required to pay high interest rates and larger down payments. Most lenders demand you pay off or settle the judgment before approving your mortgage.
Options if you have a judgment:
Pay off the judgment: This is often the cleanest solution.
Negotiate a settlement: You can settle the judgment for less than the full amount.
Get the judgment vacated: If the judgment was entered in error, you may be able to have it removed from your record.
Wait for the judgment to expire: Judgments typically expire after several years, though this varies by state.
Bankruptcy as an option:
Filing for bankruptcy can discharge certain judgments, but it’s an extreme step with serious long-term consequences. Bankruptcies severely damage credit scores and stay on credit reports for 7-10 years. Afterward, you may need to wait two to four years before being eligible for another mortgage, depending on the kind of loan you want and which program it falls under.
Considerations before deciding:
- Look at how much money is involved in your overall financial picture.
- Take into account where your current credit score stands and what other debts you have.
- Evaluate income stability and ability to make mortgage payments now vs later if different.
Alternative mortgage options:
- FHA loans may be more forgiving about past credit problems like judgments (or bankruptcies).
- Some non-traditional lenders might work with borrowers who’ve gone through bankruptcy proceedings or had judgments awarded against them.
Remember that each situation is unique. Therefore, I suggest speaking with a licensed loan officer who can review your file in detail.
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