How to Buy a House With Student Loans in Income Based Repayment

It is no secret that student loans cause debt ratio issues when qualifying for a home loan.  While mortgage lending hasn’t caught up with student loan debt payment options, there are great solutions available.  So let’s share creative ways millennials and first time buyers with even large student debt could buy a home.  Plus buy a home with great terms!

Per a recent Federal Reserve report **, student loan debt is rising at an alarming rate of $2,701 per second!  As of January 2017, student loan debt is approximately $1.4 trillion!  Obviously this is a problem.  We don’t have a solution for this stat, but we do have a great option for many that desire to be a homeowner.

How…

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Annual Movers Study: NC and SC Rank High for Relocation


United Van Lines 2016 Annual Movers Study

Every year United Van Lines compares inbound and outbound movers in each state.  So basically it is a relocation study.  They are able to determine which state is the nation’s “Top Moving Destination”.  In 2016, the top spot goes to South Dakota which broke the 3 year streak of Oregon.

“For 40 years, United Van Lines has been tracking which states people are moving to and from. We also survey our customers to understand why they are moving from state-to-state,” said Melissa Sullivan, director of marketing communications at United Van Lines. “As the nation’s largest household goods mover, the data we collect is reflective of national migration…

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Self Employed Tax Return Issues? Bank Statement Income Program

Self employed borrower bank statement program

 

Too often borrowers with incomes that are difficult to document, especially self employed borrowers, have a very hard time obtaining a mortgage loan approval to purchase a home.  Well, we have a mortgage loan option which is lenient on previous credit issues and can use the borrower’s bank statements to calculate their income and can be described as:

  • Flexible guidelines
  • Favorable terms
  • Understanding
  • Alternative solution
  • Unique
  • Up to $2,000,000 loans

Buyers with at least 20% down can have access to this product which is more forgiving in the areas of credit and income documentation compared to FHA, Fannie, Freddie, or VA.  NO TAX RETURNS…

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Unreimbursed employee expenses form 2106 and mortgage loans

Unreimbursed Employee Expenses can cause issues with calculating mortgage income

An often overlooked and potential deal killer on mortgage loans is a few pages back in the tax returns on Schedule A called “Employee Business Expenses”.  If you have found this article through an online search down the road after it was written, it is probably because you or a client is having an unreimbursed employee expenses issue which is causing an income calculation problem on a mortgage.  We hope this is not the case, but at least we want to educate you on the subject and hopefully save your loan now or in the future.  When a taxpayer completes their tax return with unreimbursed employee expenses, they are basically telling the IRS the following:

  • In…

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USDA Funding Fee for 2016-2017 Announced

2016-2017 USDA Funding Fee and Annual Fee Decreases

Huge Decrease in the 2016-2017 USDA Funding Fee & Annual Fee!

The USDA Funding Fee is a key part of the USDA home loan program and basically pays for the program.  First, USDA mortgage loans are so popular (especially in NC, SC, and Virginia) because it allows homebuyers to purchase with no money down.  Additionally, USDA loans provide a fixed 30 year payment.  Now USDA just got better!!  The 2016-2017 USDA Funding Fee is decreasing dramatically and even the Annual Fee is decreasing as well.  Because foreclosure and delinquency rates have fallen to historic lows, USDA could afford this reduction.  Less risk means less costs.  USDA Rural Housing Service Administrator Tony Hernandez said “When our…

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Did you know that some forms of nontaxable income can be grossed up?

All forms of mortgages allow for grossing up certain types of nontaxable income.  The reason nontaxable income can be grossed up is because typically mortgage loans go by a borrower’s gross income.  The amount that nontaxable income can be grossed up depends on the loan type and sometimes the tax rate that the borrower is in.  If the borrower(s) do not have to file a tax return, then the standard is grossing up income by 25%.  The grossed up figure is determined by taking the income amount and multiplying it by 125% or 1.25.

Examples of types of income that all or portions can be grossed up are:

  • Housing allowance for pastors & reverends.  Check out our blog on…

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Will Credit Inquiries Hurt My Credit Score or Mortgage Approval?

So has the lending world scared you into believing your credit score is your whole meaning in life?  Obviously it isn’t, but it does play a very important role in key areas of life.  Some you may surprise you.  Credit scores could determine insurance rates, employment, opening a bank account, and of course, borrowing money.  Scores are especially important in mortgage lending.  There are several factors which make up a credit score.  One of these factors are credit inquiries.

A credit inquiry means a company or person is “pulling” your credit report.  Although there are more credit inquiries affect on credit scoresimportant factors, credit inquiries generally contribute to 10% of the overall score.  Therefore, credit…

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FHA Decreases PMI Rates for 2017 – Lower Mortgage Payments Means Time to Buy!

FHA loans are well known for helping buyers obtain a very affordable house payment.  Well FHA, one of the most popular loan programs, just became even cheaper because HUD lowered FHA PMI rates for the 2nd time in 2 years.  The Federal Housing Administration will reduce the annual premiums most borrowers will pay by .25% – .45%.  FHA has determined that an appropriate level of reserves have been met to meet operational goals.  This sufficient level of assets therefore warrants a decrease in the amount of insurance required to offset FHA lending risk.  This reduction results from better quality of loans and less foreclosures.  So lower losses means FHA doesn’t have to…

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Tax Return Issues That Can Cause Delays or Denials When Buying a Home

Tax Return Issues are Rampant in Mortgage Lending

Tax Returns & the IRS Validation of the Returns Can Cause Closing Delays or Even Unexpected Loan Denials!

Most think that mortgage loans are as simple as providing a tax return that shows an income and the mortgage income verification is done.  This couldn’t be further from what actually happens in the background which mortgage lenders are required by laws, lending agencies such as FHA, and/or by investors.  A sampling of the things lenders are looking for that have to do with tax returns are as follows:
  1. Tax return transcripts from the IRS:  This is to verify that the tax returns provided are the actual ones…

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Receiving social security disability is not a reason to be denied for a mortgage


Mortgage home loans allow buyers to count social security disability income

Mortgage home loans allow buyers to count social security disability income

A common but difficult to prove required mortgage loan stipulation in the past was if a borrower receives Social Security disability or other type of disability income, the borrower had to proof that the income is likely to continue for 3 years from closing.  This practice is not allowed as per the Consumer Financial Protection Bureau (CFPB) as it is considered discriminatory.  Mortgage companies define a source of income as “current documented income that is likely to continue for at least 3 years from closing”.  Well there are protected classes and the disabled is an important…

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