Ulster County Mortgage Modification Tips On Income
by Dylan Taft
on Wednesday, July 14th, 2010 at 2:37pm.
There is a backlog of hundreds of thousands of mortgage modifications and thousands more get submitted each day. Along with those applications, for thousands of honest and hard-working Americans go the best hopes of keeping their homes. So, getting the applications done right is a very important matter. Still, many...maybe even most of applicants who review their application with me before they submit it make mistakes in that section of the application. They get their own income wrong!
1. Include the correct income. Include the income from the folks signed on the loan. All other household income need only be included if you choose. Even if your spouse or partner or parents or kids contribute to the household income...just include their income if you need it to get your ratios right.
2. Calculate household income correctly. Strange as it sounds, many people do not know how much money they make each month. They just know it's not enough. Well, it really matters here so pay attention. Common errors are using net income rather than gross, confusing bi-weekly with semi-monthly pay periods for calculating and using last tax year's income instead of recent income. Show how you came up with the monthly figure used in your household budget. Write it right on the paystub or other pay proof.
3. Document your Income beyond reasonably. Go beyond what is reasonable in this area. Do more than the bank requires. Imagine that your application is actually in front of an underwriter for final approval. You want it to be bullet-proof. I recommend that you notarize your self-employed P&L, include annual award letters as well as check copies for SSI and EDD earnings. Create and notarize Attestation Statements on bank statements when used as documentation of cash earnings, etc.
4. Add to your income if you need to. If you do not have adequate income to qualify for the modification then you have to add to it. To apply when your ratios are too high (income too low) is a waste of time. Some ways you can add to your income include: If you are self-employed, use best recent period Rent a room Rent a garage 2nd job Kids pay rent Parents pay for care, driving, room, etc. Contribution Letter
5. Reduce your income, if you must. That's right, some people fail to qualify because their mortgage payment is too small a percentage of their household income. They actually have to reduce their income! Some ways my clients have reduced their incomes in order to qualify include: Remove income from any household member not on the loan Scrutinize untraceable income - like tips Remove "at risk" income - like bonuses based on company performance Scrutinize expense items on self-employed P&L
Take this section seriously. It's the basis of your application. Get it right and you're off to a good start!