Ask The Underwriter – Stated Income The Right Way!
Posted by admin under: Main Feb 15In the past stated income was only for self-employed borrowers. As time passed it slowly begin to expand to salaried borrowers. While a few lenders have gone back to self-employed only, most lenders still offer the product to both.
Times have changed, companies have closed and investors have tightened their guidelines. Stated Income is a great program if documented correctly.
Licensed borrowers should provide a copy of their active license to add strength to their file. If the borrower is in the IT industry any certifications they have will be helpful.
Examples:
Real Estate Agents
Nail Technicians
Accountants
Barbers & Cosmetologist
Contractors
Licensed Day Care Providers
With W-2 borrowers, it’s best to go to Salary.com, Salaryexpert.com, etc. If you find the income too low, this is your borrower’s opportunity to provide you with additional information confirming they are on the higher paid in of that industry.
The application and credit report are the primary source of Information to determine reasonableness:
Location (Cost of living is higher in NY: Average Teachers in NY income will be higher than Georgia)
Position
Length of employment (or time in the profession)
Depth and use of credit
Asset accumulation matches with the number years employed in the profession
Lenders are taking extra precautions with Stated Income now and some have even dropped salaried stated income programs. Make sure the income you’re stating is accurate. Use good judgment when submitting stated income loans.
Take the extra ten minutes before you submit your file to consider:
Have I documented my file with enough information that the underwriter will understand my borrower’s income?
Does my borrower have enough assets to support the income shown?
Does the income appear reasonable? If not, what documentation do you have to confirm reasonability?
D. Bass
Mortgage Underwriter & Trainer
Questions: asktheunderwriter@alphamortgagetraining.net
http://www.alphamortgagetraining.net
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Friday, February 15th, 2008 at 7:05 am and is filed under Main. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.