CREATIVE WAY TO CALCULATE INCOME
One of the most important concepts of the mortgage loan underwriting is called “paid as agreed”. In other words, lenders need to be convinced that borrowers’ source of income will ensure that. And this can be tricky. It seems that the best guarantee is employees who receive a salary. But what happens if they lose their jobs, as it happened to hundreds who were let go by the large public companies? As a result, lenders constantly seek for the alternative ways to how to calculate clients’ ability to pay on time. These programs are called Non-QM (i.e. non-qualified mortgages, which do not require government scrutiny, and therefore have higher price (interest rate).
One of these options was introduced to us by Debra Kidder-Steere from Newfi Wholesale during our regular staff meeting. Income is calculated based on the funds invested into the retirement account. Thus, if the borrower has $360,000 in IRA or 401K retirement program, this can be translated into$10,000 a month as an income. Follow this link to watch a video recorded during our conversation with Debra.
There are many other ways we can use to qualify borrowers, especially borrowers who have limited (reported) income, like these who are self-employed clients.
Feel free to contact me on the phone or by email provided below.
I promise to help!
Manny Kagan,
President,
Pacific Bay Financial Corporation
(415) 225-7920;
mannykagan@comcast.net
NMLS #205637
DRE #00824602