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ubud
34 Posts |
 Posted - 07/19/2008 : 6:00:03 PM
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| 1/2 of Client's down payment and reserves are not seasoned. Any options? Also, 41/50 Dti... 691 fico, SFR, 500K 90% LTV full doc |
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lukeallison
1328 Posts |
Posted - 07/19/2008 : 8:42:42 PM
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This looks like a possible Fannie/Freddie Jumbo scenario. Your DTI is a bit high but maybe you can get an exception. How soon do you need to close that the funds could not be seasoned by the time to do a VOD?
If the 5% are a gift or something else, then I think you are okay because as long as the client has their own 5% into the transaction, then gift funds are okay. |
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ubud
34 Posts |
Posted - 07/19/2008 : 10:21:41 PM
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| Any idea if they allow home office and deprecian to be added back into the income? The borrower is SE. This may help with the DTI.... Thanks! |
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lukeallison
1328 Posts |
Posted - 07/19/2008 : 10:40:47 PM
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| Yes, any "on-paper" expenses can be added back into the income. You could also see if there are items on the credit report that can be shown are paid out of the business that can be removed from the DTI as well. |
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ubud
34 Posts |
Posted - 07/19/2008 : 11:09:15 PM
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quote:
Originally posted by lukeallison
Yes, any "on-paper" expenses can be added back into the income. You could also see if there are items on the credit report that can be shown are paid out of the business that can be removed from the DTI as well.
When you say "on paper" do you they need to provide proof of the expenses other than just the tax returns?
Yeah, their $500 a month car loan is used for business as well, and also on their personal credit report. You can add that back in huh? I am new, so sorry if that sounds dumb. I guess I am not getting "broken in" with an easy one! |
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lukeallison
1328 Posts |
Posted - 07/19/2008 : 11:22:07 PM
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No, it's not dumb. Pretty much you just need the tax return. Take net income and add in any expenses that he took that were just on paper, meaning that he didn't actually pay cash for them, like depreciation. As for the car payment, if he pays that out of the business and it is deducted on the business returns then your underwriter should let you take that expense out of the personal debt. If you think about it and prepare it practically, then your underwriter should also view it as such.
Please feel free to email me or call me if you have questions. I definitely don't mind helping you "break in" your file. |
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williamspeaking
4039 Posts |
Posted - 07/20/2008 : 01:27:46 AM
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| fnma fhlmc have a strict 45% back end on "confumbo" so 50% wont work period....also the DP is trouble if they cant verify the 10% down isnt theirs.... |
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ubud
34 Posts |
Posted - 07/20/2008 : 10:01:14 PM
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| Hey, thanks for all of your answers.... but what about home office? They currently rent their home and are deducting 30% of their rent, as the space is allocated to runnung their business... also charitable donations? They have 2k in donations to salvation army, etc. |
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rortega
944 Posts |
Posted - 07/20/2008 : 10:46:29 PM
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| Also, I believe you need a 700 fico when exceeding 80% LTV unless that has changed recently. Fannie & Freddie are definitely strict on back end debt ratios. Just throwing in my two cents as well. Thanks and good luck on this one. |
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