According to the rules "Implementation Tip: The ATR/QM rule does not apply when you alter an existing loan without refinancing it. So you can provide a loan modification to a defaulted (or non-defaulted) consumer without complying with ATR. You can find a discussion of what changes to a loan will be treated as a modification rather than a refinancing in Regulation Z at § 1026.20(a)."The following shall not be treated as a refinancing:A renewal of a single payment obligation with no change in the original terms.A reduction in the annual percentage rate with a corresponding change in the payment schedule.An agreement involving a court proceeding.A change in the payment schedule or a change in collateral requirements as a result of the consumer's default or delinquency, unless the rate is increased, or the new amount financed exceeds the unpaid balance plus earned finance charge and premiums for continuation of insurance of the types described in § 1026.4(d).The renewal of optional insurance purchased by the consumer and added to an existing transaction, if disclosures relating to the initial purchase were provided as required by this subpart."So, no. If it is truly a modification.
The question over Broker Compensation causing loans to be classified as HPML has caused some disruption in the business. It is at the heart of a movement driving current mortgage brokers to adopt the lender business model by becoming "mini-correspondents" to avoid adverse selection. The question posed: Is this a real cause or imagined? If it is real, is it worth the correspondent risk for brokers?[Website removed by Zillow moderator. Please see our Good Neighbor Policy for more information.]
Double Counting of Fees and Misleading Disclosure Rules Lead Consumers to Choose Higher Priced Mortgage OptionsDue to "double counting" of fees under the Dodd/Frank final rule, published in the Federal Register June 12, 2013, effective January 10, 2014, consumers will be driven to choose higher priced loan options when selecting between independent originators and lenders. "Double counting" in this description, defines what occurs when compensation is included in the rate AND the concurrent originator compensation for the purposes of calculating disclosures and regulatory limits. Higher Rates for ConsumersConsumer confusion causes the customer to choose between the higher of two identical loans. This scenario offers a moderate comparison of the costs; at 5%, the total payments are $347,860 while at 5.125% the total payments are $352,847 - a difference of $4,967 in extra costs to the borrower.Higher Fees for Consumers- See more at: http://www.mortgagenewsdigest.com/2013/08/broker-v-banker-regulation-forces.html#sthash.XV8mhUVA.dpuf
You will have to average income for a 2 year period. That suggestion of filing correct tax returns is a good one. Here is the strategy: Declare all of your tips, if the tips are increasing use a 24 month average. That strategy can be executed on January 1, 2014, once the year is over. Going back to re-file could trigger all kinds of red flags for the lender and IRS. Don't know if you will succeed with that. HOWEVER New Qualified Mortgage guidelines allow you to add a roommate's income...
Another poster rebutted my advice. It looks bad for everyone. Can you just take it down?
The "Streamline 203(k) loan" allows you to do up to $35,000 ($31,000 net of costs and holdback) of "NON-STRUCTURAL" repairs.
I'm with Bob - Zillow prevents loan officers from promoting products in the forums, but there are plenty of Zillow promotions in the forums. If you want a free press, buy your own, as the saying goes. I won't go as far as to call this a "scheme", but nothing is "free." I find it sad that consumers still can't see that there is no free lunch (or washer-dryer). fall for these types of schemes.
It also depends on what type of loan you have on the property. If it is an FHA or VA loan, you may be able to "streamline" or "IRRL" it. Otherwise, the limitations the other posters have referenced do apply for traditional refinances.
Brian's right - the standard documentation is two years' tax returns and a year to date income and expense statement. Hopefully you did file a Schedule C (Sole Proprietorship) for these years on your federal income tax return.A few things to add:1.) Most underwriters make you carry business debts personally, even though you pay them out of business cash flow. BUT, if you pay them from a separate business account, and can provide 12 months' cancelled checks (front and back) you can avoid the underwriter deducting these expenses from income AND treating them as a debt.2.) This is the BEST time of the year for self-employed borrowers to finance, though, because you can place more emphasis on the cash-flow based profit and loss statement in the 2 year income averaging scenario. Good luck!
I often find that the loan that a customer requests isn't necessarily the one that is best for his or her situation. This is another example. So-called "Asset dissipation" loans are utilized to circumvent the Federal prohibition against lending without regard for a borrower's ability to pay. If a lender even considers making this loan, they will do so only for retention in a lender's portfolio, because there is no secondary market for such loans. Because these loans are not marketable, rates and points will be substantially higher than market. In addition, loans such as these will draw intense scrutiny from regulators, which is an additional disincentive to making them. Consider other potential solutions to avoid paying the additional substantial costs. Most lenders will not even quote these loans without having the fully processed application and credit file for examination, so giving an indicative rate would be misleading.First - If you have substantial assets we will derive an income stream utilizing a recognized investment adviser's historical total return. For example:2,000,000 (assets) x 8.45% (Adviser's historical rate of return over 10 years) =169,000/year or 14,083/mo in qualifying income, leaving you with $5,633 for housing expenses and other debt service. Second - If you just graduated from college with a technical or professional degree, we can utilize the income that is standard for that profession to establish a baseline qualifying income. If you have this level of liquid assets, you may need to speak to a different private banker - most will literally fall over themselves to try and obtain financing for you in exchange for all of your deposits. The pledged asset mortgages (pledged securities, collateralized loans) that the other posters have referenced usually solve a problem with down payments, but not with income. Having shown you how you could obtain financing without using an undesirable product, there are a number of private asset based lenders who would make a loan like this. I saw a quote for a 5/1 ARM which was about 3% higher than what we are offering, and it carried 1 point. Be forewarned.