Tuesday, September 2, 2008

Now DPAs are gone, now what?

Now that DPA’s are pretty much gone. How can your borrower come up with the down payment?

There is always the option to save for the down payment, which seems hard for many borrowers. Other options are:
1-Gifts from a relative, borrowers employer, charitable organization, government agency or public entity or a close family friend (transaction must be documented).

2-Collateralized loans (i.e. borrower has a loan against an auto would be acceptable transaction must be documented as well as the value of the auto)

3-Sale of personal property (i.e. sale a car again the transaction must be documented as well as the original ownership and value of the car).

4-The borrower can borrower from his 401K or IRA the transaction must be documented.

5- Side jobs a borrower would have to document that they received the income and performed the work and could not be done for someone that is involved in the transaction. It could not be used as qualifying income only for down payment.
6-Employer assistance programs (must be documented)
7-borrower focus on paying off other monthly debt and save future payments towards down payment
8-Commission from sale if the borrower is a licensed real estate agent or a family member the commission can apply towards down payment
9-Sweat Equity this only applies to new homes and must meet requirements of the 4155
10-Cash value from a life insurance policy
11-Rent Credits-this is the cumulative amount of the rental payment that exceed the appraised estimate of fair market rent this is only for lease with option to buy. Must have copies of cancelled checks.

Can you think of any other options?

Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com