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I found some interesting questions and answers on an
affiliate's web page, and I'll reprint some of them here with my own
explanations added. The first one is;
What Information Will a Mortgage
Broker Need From Me? OR
What questions will a Broker ask somebody who’s
looking for a
Mortgage?
There are three main things you will be
required to provide:
i. Verification of Income
ii. How much and where the Down
Payment is coming from
iii. Personal information for Credit
Checks (Birthday, Social Security Number, Address, Job Letters, Pay Stubs,
3 years worth of Tax Returns, 3 months worth of Bank Statements, any
current Retirement Savings Funds…)
Your Banker or Broker will want to confirm
your ability to qualify by doing a GDS Ratio (Gross Debt Ratio) and a TDS
Ratio (Total Debt Ratio).
A Gross Debt Ratio is
determined by taking the Mortgage Payment, the Property Taxes, and a Heat
Component (really hot areas will be exempt from this, I’m guessing!),
which is usually around $50.00. These numbers are added together.
That number is multiplied by 12, then divided by your Gross Income
Amount. This number can’t exceed 32% of your Gross Income.
Some banks &/or brokers may have different criteria, but this is a
commonly used method to see if a client can qualify for a mortgage.
The Total Debt Ratio
takes the above information (the GDS Ratio) along with all other debts and
payments (whatever else you have to pay per month – credit cards, support
payments, etc.) to make sure that the Grand Total of all of your payments,
including the new mortgage and taxes, won’t exceed 40% of your Gross
Income.
N.B. Don’t get too hung up on the
math – that’s the job of the banker or broker. This is just info to
give you a good understanding of how they get their numbers.
Well, that's pretty
simple, and for a lot of lenders those are the requirements. But don't get
bent out of shape if you see one or two things on this list that you can't
get or meet. For instance, 3 years of tax returns are usually only
required for top credit loans and self employed borrowers (and some
lenders will take 2 years for self-employed!)
An experienced, competent
broker will have many sources, Star Mortgage, Inc. has
access to over 700, each with their own programs and qualifications!
Some of these are called "stated income programs", and you basically tell
the lender what you make...and they don't verify it! Now obviously
it has to be within reason, someone working 30 hours a week at a
convenience store can't claim $100,000 a year salary, but someone with a
nurse's license working part time on-call probably could. This
can affect your debt ratio in a positive way, and, on top of
that, some programs allow debt ratios of up to 50%. Plus, many
interest only mortgages have you qualify for the lowest payment
required, which can also lower your debt ratio.
GiveStar Mortgage
Broker a call, or visit their website by clicking on the
name. They have a mini-application you can fill out on line, and
they'll get back to you to discuss what you need, then they'll help you
get it!
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Mr Mortgage
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