If you experienced any financial difficulty in 2020 and are now back on your feet and looking to purchase or refinance a home this information is for you…
Every mortgage company is going to review your situation a little bit differently unfortunately, it’s not one size fits all as a result some lenders have an appetite for risk and for truly helping families and others just want to want your loan over as quick as possible and then move on to someone else. If you have had any financial difficulty in 2020 as a result of the pandemic in any way shape or form, you want a lender that understands the complex world of underwriting and really truly understands and knows guidelines.
Every situation and every family is uniquely different. Here are some general guidelines that not all, but most companies will look for if you’ve had income gyrations last year due to COVID 19. Let’s say you’re an hourly employee your hours were cut back because there wasn’t work, as a result of your income last year was a little bit lower, now as things are starting to look more exuberant for the broader economy, you are back working full-time. As long as you can document a two-year work history even if your hourly the previous year’s income should not matter as your working 40 hours per week hopefully which is the benchmark you need to be a full-time employee. You may also need to provide a letter from your employer which states your current hours are poised to continue. If you can provide this information along with the paystub and written verification of employment provided by your employer to the mortgage company your income should be considered ok to proceed.
If you had an income loss last year and you put your loan into forbearance this could become a little bit problematic, but it is fixable. If you put your mortgage into forbearance, the deferred balance would need three consecutive payments paid or pay off your deferment with your current lender servicer. Cash-out refinancing to circumnavigate the guideline will not work. Attempting to prepay deferred will not work. Paying off it full or make three consecutive payments.
The bottom line, not all lenders that do mortgage loans are created equal. Some want to give the level of care, attention to detail that results in you attaining your financial goals, while others, just want another loan on the books. Be smart, ask questions, and don’t be fooled by the speedy slick mortgage offering you are seeing online.
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