topic Re: Projected income in Mortgage Loans

Projected income

Anonymous — Fri, 01 Apr 2016 01:11:04 GMT

i started another similar thread but I feel this is more specific. I received automated approval/eligible a few weeks ago, now my LO is coming back to me now saying my DTI is 48% and too high. He did not use 2015 income which was 20k higher because we wanted to hold off on paying the taxes, even with that he tells me it won't make much of a difference. Having said that, I recently got a raise of 12.5k a year, documented, verified, submitted, and already reflected in pay, VOE to the LO a few weeks ago. I mentioned this to him today and he said it didn't matter? I am supposed to close in 2 weeks and my file is so complicated I can't start over. How do mortgage brokers/underwriters/etc handle projected income? Can they just add the 12.5k on to the annual income they already used? This seems like it's so logical but a big secret or something, I should be golden with the raise, wth??

Re: Projected income

StartingOver10 — Fri, 01 Apr 2016 09:28:56 GMT

@Anonymous wrote:
i started another similar thread but I feel this is more specific. I received automated approval/eligible a few weeks ago, now my LO is coming back to me now saying my DTI is 48% and too high. He did not use 2015 income which was 20k higher because we wanted to hold off on paying the taxes, even with that he tells me it won't make much of a difference. Having said that, I recently got a raise of 12.5k a year, documented, verified, submitted, and already reflected in pay, VOE to the LO a few weeks ago. I mentioned this to him today and he said it didn't matter? I am supposed to close in 2 weeks and my file is so complicated I can't start over. How do mortgage brokers/underwriters/etc handle projected income? Can they just add the 12.5k on to the annual income they already used? This seems like it's so logical but a big secret or something, I should be golden with the raise, wth??

What type of income do you have - W-2 or 1099 type?

I ask because if it is a regular W-2 type and the raise has gone into effect already, I don't understand why he wouldn't use it in your calculations for DTI.

Did he give you a solution to get to an acceptable DTI?

Re: Projected income

Anonymous — Fri, 01 Apr 2016 10:39:41 GMT

W-2, salary plus commission/bonuses, I'm not sure how he is getting to the income he is using to calculate and days/weeks go by with no progress. Now it has gotten to the point where I've been nothing but aggravated when and if I do talk to him because it really is simple math. I don't have any issues with helping my own cause but I shouldn't have to figure it out for them, it's not difficult. The way I figure, they should be able to use my new salary with the average of 2 years commission in addition to the salary, right? They have had my salary increase, 3 years of W-2s for a month now, ran something through for automated approval, and they come back to me with this now?

Re: Projected income

Anonymous — Fri, 01 Apr 2016 15:39:43 GMT

If your base salary increased, we can use your new higher base salary. Commissions and bonuses will still have to be averaged over two years and will be added to your base salary to determine your qualifying income.

Re: Projected income

Anonymous — Fri, 01 Apr 2016 16:11:00 GMT

Is this a secret or hidden gem or should every loan officer know this? If it is pretty basic that every LO knows thi and i have a LO that has been doing mortgages for 25 years, then im in big trouble.

Re: Projected income

Anonymous — Sat, 02 Apr 2016 15:50:21 GMT

I am going to lay out the formula for calculating my salary first thing Monday morning, although I feel I really shouldn't have to do the work for him. I'm curious though, is it possible there would be any overlays preventing him from calculating my salary like this? Using the raise, avg comm from the previous 2 yrs. At this stage of the game, I am going to be very blunt about it and I want to make sure he has no ammo to use against me.

Re: Projected income

StartingOver10 — Sun, 03 Apr 2016 12:34:37 GMT

@Anonymous wrote:
I am going to lay out the formula for calculating my salary first thing Monday morning, although I feel I really shouldn't have to do the work for him. I'm curious though, is it possible there would be any overlays preventing him from calculating my salary like this? Using the raise, avg comm from the previous 2 yrs. At this stage of the game, I am going to be very blunt about it and I want to make sure he has no ammo to use against me.

I think your plan is excellent.

Each individual lender can have overlays about anything. But I would find it hard to believe that they wouldn't count your income the way that dpeezy mentioned. But please let us know what happens tomorrow. We are rooting for you.

Re: Projected income

Anonymous — Sun, 03 Apr 2016 14:23:26 GMT

I don't see it either, it is a little more complicated then straight salary, but it's still earned income, not child support, soc sec, rent, etc. I'm about to pull the trigger with another lender who told me off the bat that is how he would calculate my income if I don't get a straight answer tomorrow, I'm just concerned it will push the process out way too far, time of course that I don't have.

Re: Projected income

Anonymous — Tue, 05 Apr 2016 22:11:30 GMT

What a disaster, I'm supposed to close in a week and a half. I had to proactively give the LO and processor the formula for calculating my salary, which of course they had to review. They had to verify some CCs were paid off and now without a straight answer as to whether we will qualify or not, they sent it to the underwriter. The processor said the Uw needs to verify they calculated everything correctly and it would take 48-72 hrs. Is this actual Uw or is he/she just checking their calculations? Hard to believe we don't have an appraisal or straight answer with a little over a week left to close.

Re: Projected income

StartingOver10 — Tue, 05 Apr 2016 22:16:47 GMT

@Anonymous wrote:
What a disaster, I'm supposed to close in a week and a half. I had to proactively give the LO and processor the formula for calculating my salary, which of course they had to review. They had to verify some CCs were paid off and now without a straight answer as to whether we will qualify or not, they sent it to the underwriter. The processor said the Uw needs to verify they calculated everything correctly and it would take 48-72 hrs. Is this actual Uw or is he/she just checking their calculations? Hard to believe we don't have an appraisal or straight answer with a little over a week left to close.

Actually, 48 to 72 hours is standard underwriting time where the underwriter looks to see if all the boxes are checked and approves the loan.

Did they say they were going to have an actual appraisal or just do a "drive by" or automated valuation? Is this loan going on the secondary market (Freddie or Fannie) or being held 'in-house'? Based on the info you provided before it sounds like a portfolio product.

Re: Projected income

Anonymous — Tue, 05 Apr 2016 23:03:36 GMT

It was run through for an automated approval so I'm assuming it's Fannie or Freddie? I have not been given any info on appraisal method but am unaware if a drive by is allowed or an option? The way they made this sound is like the Uw is just looking at it for now to see if it is calculated correctly. Do uws look at everything, then again as a final or is it a once over?

Re: Projected income

StartingOver10 — Wed, 06 Apr 2016 00:32:27 GMT

@Anonymous wrote:
It was run through for an automated approval so I'm assuming it's Fannie or Freddie? I have not been given any info on appraisal method but am unaware if a drive by is allowed or an option? The way they made this sound is like the Uw is just looking at it for now to see if it is calculated correctly. Do uws look at everything, then again as a final or is it a once over?

Can be done either way - either the u/w looks to see if it is calculated correctly and then the file is submitted when you have the appraisal (or however they are determining the collateral valuation). You get a few conditions and once they are satisfied you close. Sounds a little tight on time with the new trid rules unless they have given you a closing disclosure already.

Re: Projected income

Anonymous — Wed, 06 Apr 2016 00:48:38 GMT

No closing disclosure yet, we have a lot that can go wrong in a short amount of time, just afraid it will.

Re: Projected income

Anonymous — Wed, 06 Apr 2016 02:28:51 GMT

He also just told me in order for them to use 2015 income, we have to file and pay 2015 taxes, can't file for an extension. Is there a guideline about filing taxes for mortgages somewhere because I think he is incorrect.

Re: Projected income

Anonymous — Fri, 08 Apr 2016 00:15:05 GMT

So my situation gets better, not really. The UW calculated my salary correctly and we were under 45%dti, great. Nope, our &?$()!@ student loans. My wife just consolidated hers to get a payment schedule because they were in deferment, my loans were showing small payments due about $169 on 53k, this wasn't sufficient for the UW, they want a schedule which I do not have. I can get one but I don't think it will be close to 169 a mo. LO basically said-look put down 15%, we won't need student loan schedules, DTI can go higher, better rate, less due at closing? We don't really have the 20k under our pillows but we can take the rental income due to us at closing and use it, that was supposed to go into a separate account for this house. How can 5% more down make so much of a difference and be less stringent?

Re: Projected income

StartingOver10 — Fri, 08 Apr 2016 01:59:45 GMT

@Anonymous wrote:
So my situation gets better, not really. The UW calculated my salary correctly and we were under 45%dti, great. Nope, our &?$()!@ student loans. My wife just consolidated hers to get a payment schedule because they were in deferment, my loans were showing small payments due about $169 on 53k, this wasn't sufficient for the UW, they want a schedule which I do not have. I can get one but I don't think it will be close to 169 a mo. LO basically said-look put down 15%, we won't need student loan schedules, DTI can go higher, better rate, less due at closing? We don't really have the 20k under our pillows but we can take the rental income due to us at closing and use it, that was supposed to go into a separate account for this house. How can 5% more down make so much of a difference and be less stringent?

^^More down is less risk to the lender. A larger down payment can be considered a compensating factor.

Re: Projected income

Anonymous — Fri, 08 Apr 2016 02:13:13 GMT

Well now I actually have my student loan schedule and it's only 50$ more a month which isn't nearly what I thought it would be, and it is an amortized schedule. Now what do I do? I told him to go ahead with the 15% method but I think with this we can probably revert back to the 10% method and be ok. The 15% is going to wipe out my savings to make it happen, we do have 401k reserves but are not touching that. I'm at a loss right now, the LO already told me we were looking at closing 2 weeks after the scheduled date too. I prefer to put 10% down but feel 15% is less hassle, and will happen faster. I know it's my decision but good to hear other opinions.

Re: Projected income

StartingOver10 — Fri, 08 Apr 2016 02:16:04 GMT

@Anonymous wrote:
Well now I actually have my student loan schedule and it's only 50$ more a month which isn't nearly what I thought it would be, and it is an amortized schedule. Now what do I do? I told him to go ahead with the 15% method but I think with this we can probably revert back to the 10% method and be ok. The 15% is going to wipe out my savings to make it happen, we do have 401k reserves but are not touching that. I'm at a loss right now, the LO already told me we were looking at closing 2 weeks after the scheduled date too. I prefer to put 10% down but feel 15% is less hassle, and will happen faster. I know it's my decision but good to hear other opinions.

That is good news - $50 per month is not bad at all to fully amortize the loan. Talk with your LO to see if you can still do the 10% down. I bet he was expecting a larger payment too.

Re: Projected income

VALoanMaster — Fri, 08 Apr 2016 18:44:25 GMT

@Anonymous wrote:
Well now I actually have my student loan schedule and it's only 50$ more a month which isn't nearly what I thought it would be, and it is an amortized schedule. Now what do I do? I told him to go ahead with the 15% method but I think with this we can probably revert back to the 10% method and be ok. The 15% is going to wipe out my savings to make it happen, we do have 401k reserves but are not touching that. I'm at a loss right now, the LO already told me we were looking at closing 2 weeks after the scheduled date too. I prefer to put 10% down but feel 15% is less hassle, and will happen faster. I know it's my decision but good to hear other opinions.

Hi Obxlover,

I can't tell you how mad I get when hear/see incompetence like this from my peers. Your loan officer either sucks at his job or he kept putting your file at the bottom of his stack because it was too difficult for him.

There are other available options that don't require putting so much money down that, if you were working with me, I would explore. It seems to me like they are taking the path of least resistance at your expense. If I were you I would pull my file and take my business elsewhere just based on principle.

One last point. In your first post you mentioned your DTI was at 48% but the LO said it would not make a difference to add an extra 20K for 2015 plus the 12.5K raise for a total of 32K. I can't figure out how increasing your income by 32K wouldn't drop your DTI by over 3%. I wonder if there is something else the LO isn't telling you?

Please feel free to PM for more information or help.

Good luck.

Re: Projected income

Anonymous — Fri, 08 Apr 2016 20:01:59 GMT

Hi VA, thanks for responding. I know where you are coming from but I don't believe it's that simple, there are some things that were not mentioned in this thread, I really started it because of my income. This is a 2nd home/vacation property that receives rent all summer but is not considered an income property. 10% is absolute minimum and although I do just think he wants the easy way out, 15% seems to get it done although I still don't have an answer yet.