real estate finance - full book (500 pgs)

If the income is derived from stocks the lender will

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Unformatted text preview: ekly, monthly, or bimonthly. This type of income is thought to be the most stable. If the prospective homebuyer is married and the spouse is employed, the income from the spouse will also count if the spouse has met the employment pattern and stability requirements of the lender. In the past, many lenders would discount, or in many cases eliminate, the salaried income of a woman if she was capable of having children, no matter what her profession or how long she had been employed. This practice was stopped with the passage of the Equal Credit Opportunity Act, and lenders are no longer allowed to discount income due to sex, age, or marital status. Overtime – This type of income is standard to many jobs and can be counted toward the prospective homebuyer's stable monthly in–come. It must be proved by the homebuyer that the income has been regular in the past and that the chances are good that it will continue in the future. To establish that the overtime income has existed in the past, the prospective buyer may wish to supply copies of his or her paycheck stubs to the lender showing the overtime hours worked in the past year. To establish whether the overtime will continue, the mortgage lender will, when verifying the income of the applicant, ask the employer to state if there is a possibility of the overtime continuing. Lenders are reluctant to include overtime because, in most cases, it is not consistent and dependable. If borrowers can prove that they will continue to work overtime in the future, lenders will consider overtime pay. In other words, the borrower must have had consistent overtime in the past and must have a job that demands overtime. A good example would be a police officer working as a detective, since such work consistently requires overtime due to the nature of the job. Other examples include firefighters, grocery clerks, truck drivers, and phone company and other utility employees. Commissions – If the prospective home–buyer is paid by commissions only, or is self–emp...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.

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