Roommate’s rent can help you qualify for a mortgage
VAIL, Colorado While current market conditions can often make it difficult to obtain mortgage financing, there are still some bright spots and advantageous financing means available.For example, there are loan programs available that will allow a borrower to use income from a roommate as verifiable income for qualification. Current lending guidelines for qualifying income are fairly strict, and while there are stipulations with using boarder income for qualification, it is encouraging to know that the option does exist.Stipulations for using boarder or rental income to qualify for a loan are as follows:The roommate must have lived with the borrower and paid rent for the last 12 months, the rent/income can not exceed 30 percent of the borrowers total gross income, and proper documentation to verify the relationship such as a copy of the roommate’s driver’s license, utility bills, bank statements or cancelled checks will be required.Each borrower and transaction still remain subject to the standard variables and criteria of a mortgage such as credit score and content, down payments and cash reserves, employment and income, property type and so on. With this being the case, it can only be determined how this will help borrowers on a case-by-case scenario. Nonetheless, the ability to use a non-traditional source of income as this certainly creates opportunity for potential borrowers.Other bright spots: Tax credits of $7,500 are offered to first-time home buyers through July 1, 2009. Properties can be purchased with as little as 3 percent down payment. Programs that will count non-traditional sources of income such as this boarder income still do exist. And mortgage interest and real estate taxes are still probably the best tax deductions available. Factors such as these are evidence that both the federal government and mortgage lenders recognize the dire importance of getting the real estate market vibrant and back on its feet in order to help the national and global economies.While there have been significant changes and corrections within the mortgage industry over the past 12 to 18 months, there are still some surprisingly advantageous and promising opportunities with mortgage lending. Given the fact that property values are in a period of stagnant growth, now may be the time to examine buying property. But even with the advantageous terms outlined in his column, the process is a bit more complex now and requires guidance from a trusted, educated and experience mortgage professional. William A. DesPortes is a managing member of DesPortes, Selig & Associates, Professional Mortgage Services. He can be reached at 970-926-9393 or email@example.com.
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