Projected income

Anonymous · ‎03-31-2016

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??

StartingOver10 · ‎04-01-2016

@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?

Anonymous · ‎04-01-2016

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?

Anonymous · ‎04-01-2016

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.

Anonymous · ‎04-01-2016

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.

Anonymous · ‎04-02-2016

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.

StartingOver10 · ‎04-03-2016

@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.

Anonymous · ‎04-03-2016

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.

Anonymous · ‎04-05-2016

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.

StartingOver10 · ‎04-05-2016

@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.