Mortgage fun facts! Did you know.....
By: Freeman Liz
September 30, 2010
Read this post and amaze and impress your friends!
True or false: when qualifying for a mortgage, income from roommates cannot be counted.
Answer: False! Sort of false, anyway. You can't buy a home and say that you will be renting out part of the house and have the lender count that income in your qualifying ratios. But if you already have a roommate or two and (here's the tough part!) you include that income on your taxes, the lender will count it. Don't want to pay taxes on your boarder income? It's actually not bad because you could offset it with depreciation (or rent) and utilities (sort of like you would do a home office). So if you have roommates, put them on your tax return. If you are kicking yourself because you didn't do it in the past, you can always amend your old returns or get a tax pro to help you.
True or false: You have to be a US citizen to get a government-backed mortgage.
Answer: False! While you have to be a legal resident, you don't have to be a citizen. Do you have to be a permanent resident alien, or can you qualify with temporary residency status? You can! Non-Permanent Resident Aliens are eligible for FHA-insured mortgages provided the property will be the borrower's principal residence, the borrower has a social security number, and the borrower is eligible to work in the US.
Evidence of residency and work status should be obtained from US Citizenship and Immigration Services (USCIS). If the authorization for temporary residency status will expire within 1 year, and there has been a prior history of renewals of the residency status, the lender may assume continuation will be granted. If there are no prior renewals, the lender must develop the likelihood of renewal through the BCIS or other appropriate sources.
True or false: There is no subprime mortgage lending in America today.
True! Sub-prime lenders as we know them have ceased���� to underwrite and fund these loans. However, much of the demand is being met by FHA lenders (for applicants whose bad credit is at least two years behind them) and hard money lenders (for people with bad credit who can have a lot of home equity or big down payments). FHA requires credit in the 600s for most applicants but only 3.5% down is required. Hard money lenders don't care too much about credit but you may need 25% - 40% down, several points in closing costs, and you'll pay an interest rate about 6% higher than borrowers with good credit.
