Financing in Penngrove>Question Details

Beth, Home Owner in Penngrove, CA

Self-employed - Doc or no doc?

Asked by Beth, Penngrove, CA Fri Mar 28, 2008

My husband and I are both self-employed and are looking at stated income loans. Our broker says stated income loans are few and far between these days. We have a 20% for our down payment and excellent credit. Naturally we want to get the best rates we can get. Looking at our tax returns our income looks low, but it varies a lot. We are comfortable with the monthly mortgage payment estimates we have, and are prequalified. Do large cash gifts count towards a documented income? We may try the documentation route.

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3
Beth - your broker is absolutely correct. Stated income programs went away (for the most part) along with the lenders that offered them in the past.

Did your broker fully review your tax returns to confirm your eligible income?

And where are you at with your 2012 tax preparation?

This is the time of year when loan officers can actually counsel their clients towards how much adjusted income to report so they have qualifying income for their home purchase...

As the responder from Amerisave mentioned, there are stated income loans out there, and they do have much higher fees/rates involved....so it really boils down to assessing how badly you want to buy a home, and what compromises you'll consider making!

Let me know if I can be of further assistance and good luck!

Best, Jeff Marr
0 votes Thank Flag Link Sun Feb 10, 2013
Thanks Jeff! We did end up with a stated income loan at 5.875% back in 2008. We then refinanced (streamlined?) to 5.675% in 2010 and are looking to refinance again in the next few weeks to something more reasonable. This time we are going the full doc route, but since I had kids in the meantime my freelance income took a hit.

That is good advice about talking to our mortgage broker about income reporting.

I usually take all the deductions I can, but maybe this year I won't claim as much. It would mean saving maybe $300-$500/month if we can refinance the $337K remaining on our loan. Our mortgage payment is under $2K/month, but I always pay an extra $100-200 each month toward the principal.
Flag Sun Feb 10, 2013
I have not deep knowledge of it but as far as I know, large cash gifts count towards a documented income.
0 votes Thank Flag Link Mon Dec 13, 2010
Hi Beth,

Contrary to popular belief stated income loans still exist as well as stated income/stated assets. No doc, no ratio, No Income/No Assets (NINA), No Income/Verified Assets (NIVA) do not exist. If we did away with stated income documentation, every small business owner would be in jeopardy of not being able to purchase or refinance their house.

You going to take a BIG hit to the rate if you go stated. If at all possible try to go full doc. With your adjusted gross income make sure that you know what your DTI ratio is (income / liabilities).
0 votes Thank Flag Link Sun Mar 30, 2008
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