I’m Sorry But You Must Have Income To Get A Mortgage
Posted by Jim Stewart on Thursday, November 17th, 2011 at 11:38am.I’ve recently run across this situation twice in a very short time frame so I thought it would be good to write this for other prospective buyers of homes: A prospective home buyer finds a home they really like and want me to help them buy it. Great! The buyer has a high down payment of 20%+. Fantastic! The buyer has plenty of cash left over in reserves. Awesome! Their credit is A-OK! Incredible! The problem is that in neither case did the potential buyer have enough income to qualify for the mortgage. One is self-employed with lots of revenue but writes off so many expenses that their net income as shown on their taxes wouldn’t even be enough to pay the monthly utilities. The second potential buyer works part time while looking for full time employment. Both are very upset that they can’t get a loan. They felt that given the amount of money they are putting down that banks should be lining up to give them a mortgage. Unfortunately, it doesn’t work that way anymore. Thanks to the “liar loans” and “NINJA loans” of five to seven years ago having blown up in a major way, you MUST show enough income to be able to afford the payments. Banks don’t care how much money you have socked away or about how high your credit score or how awesome your prospects for the future are unless you have the current, provable income to back it up. While it may seem that the old adage that banks only lend to people who don’t need loans seems to be making a comeback, it’s really not the case. Banks are lending and loans are cheap right now (30 year fixed rate mortgages around 4%!). But, you do have to meet ALL of the qualification standards. If you need help understanding all of this or would like to just speak to someone about whether you qualify for a mortgage, just give us a call at Assist 2 Sell and we can refer you to a mortgage professional who can help you make sense of it all.
Cheers!
Jim Stewart
Certified Distressed Property Expert
Broker/Officer
417-889-7000
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