Posted on: 28th Feb, 2008 01:20 pm
My wife has become self employed in the same industry she has worked for 4 years. She is a hair stylist and is now booth renting. We have sold our current home, as of July, and will be purchasing our new home around that time.
We were told that her income cannot be considered because she has worked less than 1 year self employed, but that it may be a "compensating factor" in a manual underwrite. She does quite well, but if her income is NOT included, our debt ratio will be 64% with the new home. With her income, it will be 38%. The lender seems to think that this will go through. Will they consider my wife's income as a contributing factor to my direct income, or as a lowering of my debt ratio? I guess what I am asking is how this will work. She has obvious deposits into her account almost daily. Lots of Credit Merchant ACH's, etc... Just Curious. Thanks
We were told that her income cannot be considered because she has worked less than 1 year self employed, but that it may be a "compensating factor" in a manual underwrite. She does quite well, but if her income is NOT included, our debt ratio will be 64% with the new home. With her income, it will be 38%. The lender seems to think that this will go through. Will they consider my wife's income as a contributing factor to my direct income, or as a lowering of my debt ratio? I guess what I am asking is how this will work. She has obvious deposits into her account almost daily. Lots of Credit Merchant ACH's, etc... Just Curious. Thanks
Hi Jtbone,
Welcome to the forums.
I guess if you become the primary borrower provided your credit and income are ok and your wife the secondary borrower, then there won't be issues relating to her being self-employed for a year. The lender will consider your debt-to-income ratio and not your wife's if you are the primary borrower here. But how's your income and credit score like?
Most importantly, the debt ratio will be calculated considering gross monthly income and not the total income for 2 years.
Take Care
Welcome to the forums.
I guess if you become the primary borrower provided your credit and income are ok and your wife the secondary borrower, then there won't be issues relating to her being self-employed for a year. The lender will consider your debt-to-income ratio and not your wife's if you are the primary borrower here. But how's your income and credit score like?
Most importantly, the debt ratio will be calculated considering gross monthly income and not the total income for 2 years.
Take Care
In general, lenders do check out for 2 years of self-employment. But for those being self-employed for a year, they are likely to offer higher rates. I suggest you don't go for high rate loans initially; rather look for some other lenders compare the rates and then choose the one. And, as Sara said, if you list yourself on the loan doc as primary borrower, then your income and credit records will be the primary ones under observation and not your wife's records.
Thanks for the help. I understand that my income and credit will be the primary ones under observation. Out credit is really pretty good. We are both around 650-685. I am mostly concerned about our monthly debt to income ratio. We have a car payment and a loan that takes up 27% of MY monthly income, but only 18.5% (conservatively) if we combine our income. When they told me her income would be considered a contributing factor to my income, I am assuming that they are going to consider part of her income as mine.
Thanks for the help, guys. Great forum!!
Thanks for the help, guys. Great forum!!
Hi Jeff,
The lender considers the gross monthly income of the primary borrower as well as his/her spouse. So, when your debt ratio is calculated, the gross monthly income will include yours primarily along with that of your spouse added together. So, yes it will be a contributing factor so that the total income comes out to be a good one to help you qualify for the loan.
Moreover, higher income will also contribute towards lowering the debt ratio. And to qualify for FHA loans, your total monthly debt payment should be within 41% of the gross monthly income. But I'd like to say something jeff, if you are going for FHA loans, have you considered the loan limit, I mean, the maximum that is available in your area? will it be enough for you?
Regards,
Jessica.
The lender considers the gross monthly income of the primary borrower as well as his/her spouse. So, when your debt ratio is calculated, the gross monthly income will include yours primarily along with that of your spouse added together. So, yes it will be a contributing factor so that the total income comes out to be a good one to help you qualify for the loan.
Moreover, higher income will also contribute towards lowering the debt ratio. And to qualify for FHA loans, your total monthly debt payment should be within 41% of the gross monthly income. But I'd like to say something jeff, if you are going for FHA loans, have you considered the loan limit, I mean, the maximum that is available in your area? will it be enough for you?
Regards,
Jessica.
Hi! We are currently not married, but considering it. Problem is, I filed for bankruptcy last year. We were preapproved on a short sale, with an FHA mortgage for 110K under my fiance. However, his income has dropped, and now we are looking at a much lower approval on his income alone. My question is, is there anyway possible under FHA to use my income (which is 56K) in conjunction with his if we ARE married, without considering my credit score or name on the loan. I saw the info on the non-owning spouse but it only talks about using the spouse debt, not income. Can you please advise?
Hi Gretchen,
As far as I know, the FHA loan must include the debts of a spouse if he/she is not on the loan. The spouse's income and credit score are not taken into consideration though. This is to make sure that you are in a financial position to afford the costs of owning a house.
As far as I know, the FHA loan must include the debts of a spouse if he/she is not on the loan. The spouse's income and credit score are not taken into consideration though. This is to make sure that you are in a financial position to afford the costs of owning a house.
way off track here...first of all, gretchen your bankruptcy filing last year is going to knock you out of consideration to begin with.
next, a spouse who won't be on a loan would never have to worry about his or her debts being considered when the other spouse is seeking a loan.
next, a spouse who won't be on a loan would never have to worry about his or her debts being considered when the other spouse is seeking a loan.
ok here's an odd one.
husband has an fha loan. slightly behind on payment (59 days) for the past 5 months. i am not on the loan. 3 people (both of us plus kid). limit for fha loans income cap in our area is around $98,000. got the loan in mid-2008. we want to consider for him to refinance only (just to put the past due & late fees on back of loan - no hand outs. if possible an interest rate reduction would be nice as it is at 6.125%). value of home is roughly the same as balance on loan (maybe value a few thousand higher). debt only is the house for him plus a few items that are not correct (under $3,000 total showing). i do have car loan in my name but for some reason since i wasn't on the loan it wasn't considered. however, now that paperwork was sent regarding helping the loan get caught up don't know how to handle a few things.
(1) contract job is for 6 months max (3.5 months ending oct - dec 2009), then 3 months in 2010. based on his income plus figuring my income for those months total income for year would be just under the income max. limits for fha for 2009. if really ends up being only 3 months in 2010 then again under the limit. (1a) how will this temp income be looked at for me if at all and (1b) the car debt that wasn"t requested before that is only under my name, does it have to be listed in the forms for the adjustment?
there is a good possibility that we can use the money from my contract job to catch up on the loan but as we've depleted all savings it would be nice to rebuild that, for emergencies (as what caused us to get behind was a change in his job hours, decription, plus a few deaths inthe family that in the long run ended up causing emotional issues to resurface (anxiety & depression) that in turn caused us to get sloppy with finances plus have some extra expenses.
any help would be great but especially if you can provide references to confirm.
husband has an fha loan. slightly behind on payment (59 days) for the past 5 months. i am not on the loan. 3 people (both of us plus kid). limit for fha loans income cap in our area is around $98,000. got the loan in mid-2008. we want to consider for him to refinance only (just to put the past due & late fees on back of loan - no hand outs. if possible an interest rate reduction would be nice as it is at 6.125%). value of home is roughly the same as balance on loan (maybe value a few thousand higher). debt only is the house for him plus a few items that are not correct (under $3,000 total showing). i do have car loan in my name but for some reason since i wasn't on the loan it wasn't considered. however, now that paperwork was sent regarding helping the loan get caught up don't know how to handle a few things.
(1) contract job is for 6 months max (3.5 months ending oct - dec 2009), then 3 months in 2010. based on his income plus figuring my income for those months total income for year would be just under the income max. limits for fha for 2009. if really ends up being only 3 months in 2010 then again under the limit. (1a) how will this temp income be looked at for me if at all and (1b) the car debt that wasn"t requested before that is only under my name, does it have to be listed in the forms for the adjustment?
there is a good possibility that we can use the money from my contract job to catch up on the loan but as we've depleted all savings it would be nice to rebuild that, for emergencies (as what caused us to get behind was a change in his job hours, decription, plus a few deaths inthe family that in the long run ended up causing emotional issues to resurface (anxiety & depression) that in turn caused us to get sloppy with finances plus have some extra expenses.
any help would be great but especially if you can provide references to confirm.
Sorry, need to clarify. I got a contract job offer for up to 6 months (actual time can't be guaranteed). The pay is great but I'll be having to go to the location for 3-6 months, and visit home once a month (company paid, not part of income).
While helping a good friend out during a divorce I allowed him to deposit his money into my account. I made him a signer on the account so he could deposit or withdraw his money when ever he needed it. Now I have qualified for a FHA loan an trying to purchase a home. Is his income in my account going to affect me getting the loan if I write them a letter telling them how much money he has put in there an why he has put it in there. How can i explain this to the lender so I wont lose the loan. His divorce was final just a couple weeks ago now he can go open his own account can i still get the loan.
Hi Meagan,
Your friend's money in your account will not affect your qualification for the loan as long as you meet the income and credit requirements. You can write a letter to the lender explaining your situation and also provide him with proof of how much money you have got in your account from your friend. If you have the income to qualify on your own, you will not have any problem in getting the FHA loan.
Your friend's money in your account will not affect your qualification for the loan as long as you meet the income and credit requirements. You can write a letter to the lender explaining your situation and also provide him with proof of how much money you have got in your account from your friend. If you have the income to qualify on your own, you will not have any problem in getting the FHA loan.
meagan, i think i'd say just leave it alone. now of course you cannot use your friend's deposits as part of your assets for qualification, and i'm pretty certain that's not even a thought you had. the only reason i think you'd need to draft a letter would be if there's a specific query about the deposits to the account. but of course, your bank statements would reflect that the account is accessible by both of you, and that would certainly explain those deposits to begin with.
i agree that you'll not suffer in obtaining approval because of his presence on your account.
i agree that you'll not suffer in obtaining approval because of his presence on your account.
When asked for monthly income, can I include part of my husbands income as mine if I am self employed and his income is used to help run my business and if he gives me a monthly allowance for shopping and helping pay my bills.
Hi Juliev!
Welcome to forums!
If you can prove that your husband's income is used to run your business and that he gives you a monthly allowance, then you would be able to include it in your monthly income.
Sussane
Welcome to forums!
If you can prove that your husband's income is used to run your business and that he gives you a monthly allowance, then you would be able to include it in your monthly income.
Sussane
Hi, stumbled across this site, and am hoping you can help me with something...
My husband purchased our home prior to our marriage. The loan and home are only in his name. We do have a line of credit in both of our names. I noticed that we may qualify for a mortgage modification. His income has decreased dramatically since he has purchased the home, and he is now currently self-employed. I am covering all/most of our bills. I was hoping the modification may help out with my covering all these bills. Though, I don't think he'd qualify if they look at my income.
Will my income be considered for his modification loan request? Or will it be 100% based on his income, debt and credit rating?
Thanks in advance, if you can help...
My husband purchased our home prior to our marriage. The loan and home are only in his name. We do have a line of credit in both of our names. I noticed that we may qualify for a mortgage modification. His income has decreased dramatically since he has purchased the home, and he is now currently self-employed. I am covering all/most of our bills. I was hoping the modification may help out with my covering all these bills. Though, I don't think he'd qualify if they look at my income.
Will my income be considered for his modification loan request? Or will it be 100% based on his income, debt and credit rating?
Thanks in advance, if you can help...