real estate finance - full book (500 pgs)

Investment or personal use is the borrower buying the

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Unformatted text preview: r the loan. If one or more of the co–mortgagors is not to occupy the home, then things can get complicated. Some lenders insist that all co–mortgagors occupy the home or they will deny the loan. Other lenders will try to work with the parties by counting some of the non–occupying co–mortgagor's income after deducting the co–mortgagor's own housing expenses and other monthly debts. Some lenders require the non–occupying co–mortgagor to be a close relative. Fannie Mae and Freddie Mac, however, have dropped the close relative requirement, but insist that the co–mortgagor not be the seller, builder, real estate broker, or any party who has an interest in the sales transaction. In short, the issue of non– occupying co–mortgagor is fluid and constantly changing, and it is difficult to give any definitive guidelines. 13-14 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 13: QUALIFYING THE BORROWER DESIRE TO PAY It was stated earlier that there are two major considerations in qualifying. One is the ability or capacity of the borrower to pay, which has been discussed. The other is the desire to pay (or willingness) of the borrower. This emotional aspect is closely related to the income of the prospective homebuyer. Many of your prospects may be marginal in their ability to pay by mathematical analysis of their income. These prospective homebuyers, though, may have the desire to pay and are willing to make sacrifices in order to buy the home they want. How does a lender determine a borrower's desire? let's look at some indicators. Payment History – This desire to pay can be shown by the past payment record of a previous mortgage. How a borrower has paid debts in the past is a good indication of what can be expected in the future. If borrowers have paid debts on time in the past, they will likely continue paying on time. On the other hand, if they had problems paying debts in the past, chances are that they will have problems in the future. People develop specific credit patterns. Lenders are interested in the overall pattern and are not...
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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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