Posted on: 01st Dec, 2010 04:15 am
Hi all - we have a fixed rate @5.99 % that has a balance of 89,000 - pay off date in 9 years.
we also have a line of credit w/ 150,000 available at 1% below prime but are only using 35,000.
we both have a credit rating of over 800 and I am self employed and while the economy has made our finances look like crap over the last few years we have never missed a payment on ANYTHING! In fact we usually over pay towards principal.
we go to re-fi w/ our current bank (after they solicit US) and are told NO because of the debt to income ratio w/ the fact that we have so much "available" cash in the unused equity line.
we were thinking of paying off the mortgage w/ the equity line and riding the low prime but still want to get another fixed mortgage at these low rates but are not sure if this would make us look better to the lenders or if just does not matter w/ our bad income statement.
thanks for reading - any thoughts are appreciated
we also have a line of credit w/ 150,000 available at 1% below prime but are only using 35,000.
we both have a credit rating of over 800 and I am self employed and while the economy has made our finances look like crap over the last few years we have never missed a payment on ANYTHING! In fact we usually over pay towards principal.
we go to re-fi w/ our current bank (after they solicit US) and are told NO because of the debt to income ratio w/ the fact that we have so much "available" cash in the unused equity line.
we were thinking of paying off the mortgage w/ the equity line and riding the low prime but still want to get another fixed mortgage at these low rates but are not sure if this would make us look better to the lenders or if just does not matter w/ our bad income statement.
thanks for reading - any thoughts are appreciated
hi tonee!
welcome to forums!
if you do not have the required debt to income ratio, the lender will not be ready to give you a mortgage refinance. in my opinion, it will be a better option to pay off your balance first mortgage with the help of heloc and then pay off the heloc as per the terms and conditions available to you.
feel free to ask if you've further queries.
sussane
welcome to forums!
if you do not have the required debt to income ratio, the lender will not be ready to give you a mortgage refinance. in my opinion, it will be a better option to pay off your balance first mortgage with the help of heloc and then pay off the heloc as per the terms and conditions available to you.
feel free to ask if you've further queries.
sussane
There are self employed No Income Verification mortgages avilable in limited areas by local banks in those areas
Available in NJ and CT and nine counties in NY and nine counties in PA
May be available in other states that I am not familiar with.
The point is: You may get a better answer if you note the state and county in which the property is located.
Available in NJ and CT and nine counties in NY and nine counties in PA
May be available in other states that I am not familiar with.
The point is: You may get a better answer if you note the state and county in which the property is located.
Don't NIV loans require the borrower to state an income sufficiently high enough to qualify. If so, aren't you encouraging tonee to commit fraud?
The mortgage application requires one state their income
It does not require anyone to state the income reported to the IRS.
The program exists because a lender understands that creative accountants often write off things for self employed persons that they are allowed to write off but may not have been actual expenses. Seems dishonest to me, but, accountants do it. So, the self employed person often pays less in income taxes because their taxable income is less. Seems dishonest to me, but, they do it.
A lender who allows a self employed person to state their income and does the stated income program properly, also requires a down payment of 30% or more and verifies liquid assets in line with the income stated.
That is verifying a lot of liquid assets.
The lender who does that locally here in NJ has done this for more than the 20 years I have been in business. Their borrowers who have late payments and foreclosure problems are less thas those with fully documented loans
How can that be?
Well, what do you consider riskier: A fully documented loan with 5% down payment and no reserves or a stated income loan with 30% down and $50,000 or more in resreves after a 30% down payment.
Fannie Mae and Freddie Mac and FHA allow mortgages all day long with 5% down and zero to two months reserves for people living from pay check to pay check. If ever a problem, they have no reserves to cover the problem
Which do you consider a better business decision???
It does not require anyone to state the income reported to the IRS.
The program exists because a lender understands that creative accountants often write off things for self employed persons that they are allowed to write off but may not have been actual expenses. Seems dishonest to me, but, accountants do it. So, the self employed person often pays less in income taxes because their taxable income is less. Seems dishonest to me, but, they do it.
A lender who allows a self employed person to state their income and does the stated income program properly, also requires a down payment of 30% or more and verifies liquid assets in line with the income stated.
That is verifying a lot of liquid assets.
The lender who does that locally here in NJ has done this for more than the 20 years I have been in business. Their borrowers who have late payments and foreclosure problems are less thas those with fully documented loans
How can that be?
Well, what do you consider riskier: A fully documented loan with 5% down payment and no reserves or a stated income loan with 30% down and $50,000 or more in resreves after a 30% down payment.
Fannie Mae and Freddie Mac and FHA allow mortgages all day long with 5% down and zero to two months reserves for people living from pay check to pay check. If ever a problem, they have no reserves to cover the problem
Which do you consider a better business decision???
Thanks to all who have replied.
Sussane I will check out HELOC
John, we are in Massachusetts and I will find out if self employed No Income Verification mortgages are available.
My real question is what the general opinion is on "rolling the dice" by paying off the 5.99% mortgage w/ the 1% below prime and when prime will rise enough to become a problem?
I know no one has the crystal ball but My main concern is that if after a year or so if rates start to creep back up and we want to go to a fixed rate, will they see us as better debt to equity since we now only have a total of 125k in debt rather than having 125k debt and 120k available funds in the equity line.
Thanks
Sussane I will check out HELOC
John, we are in Massachusetts and I will find out if self employed No Income Verification mortgages are available.
My real question is what the general opinion is on "rolling the dice" by paying off the 5.99% mortgage w/ the 1% below prime and when prime will rise enough to become a problem?
I know no one has the crystal ball but My main concern is that if after a year or so if rates start to creep back up and we want to go to a fixed rate, will they see us as better debt to equity since we now only have a total of 125k in debt rather than having 125k debt and 120k available funds in the equity line.
Thanks
I am not familiar with any stated income mortgages in Massachusetts.
You may speak with anyone.
I suggest you call John Bates at Home Savings in MA
Cell 917-589-0600 or 866-966-9525
You may speak with anyone.
I suggest you call John Bates at Home Savings in MA
Cell 917-589-0600 or 866-966-9525