real estate finance - full book (500 pgs)

In the past most lenders discounted or disallowed

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Unformatted text preview: also be included in the establishment of the monthly stable income, if the prospective buyer can establish a pattern of payments of the bonus for at least the past two years. This can be done by supplying copies of Internal Revenue Form 1099 if no deductions were withheld from the bonus, or of Internal Revenue Form W–2 if there were deductions made for social security and income taxes. The employer will be asked if there is a possibility that the payment of bonus will continue. Part–Time Work – At one time, earnings from part–time work were not counted by lenders. For example, if a borrower works only 20 hours a week, the income must be counted if the job is stable. The Federal Equal Credit Opportunity Act specifically prohibits lenders from discounting income solely because it is part time. 13-8 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 13: QUALIFYING THE BORROWER Second Job – Since more and more persons have second jobs, lenders are accepting them more and more as part of the stable monthly income if the prospective home–buyer can establish that the job has existed for at least 2 years and that the possibilities are good for the job to continue. An example of an acceptable buyer with a second job would be a police officer who in his or her off–duty hours has served as a security guard in several banks for the past 3 years. Since this type of second job is in the same field of work and the demand for security in banks is growing, the second job would not only provide extra money, but would be considered by lenders to be stable employment with excellent chances for continuing. Thus, the income would count toward the stable monthly income. Dividend or Interest Income – This type of income can be counted if it is at least $ 100 per month and the investment that is providing the income is such that it cannot be sold or cashed in easily. This is true if the dividend or interest income is not the primary source of income. If the dividend or interest income is the primary source of the home–buyer's income, the lenders are going to require the homebuyer to show the source of i...
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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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