Who Can Make Monthly Payments on the Mortgage
by Vicky from Stockton, California
Lenders have to ask: Who can make monthly payments on the mortgage? Hello Kate, First off I want to thank you for taking the time to answer so many questions from people with all kinds of unique mortgage scenarios.
I purchased my home in July 2008. I was married at the time and working but my name was the only one on title because my husband had bad credit and was unemployed.
Fast forward - I got laid off 6 months after we purchased the home in late 2008 and immediately after closing my husband found a job. He has since been making the monthly payments on the house.
We are upside down about 25k on our house and would like to try and refinance into a 4% 15 yr loan compared to our 6.63% 26 year loan that we have now.
However, my husband had a foreclosure in June 2010 on a rental property in Nevada, which has hindered him from being able to purchase the home and get a lower rate or refinancing the loan with me. Remember I am not working.
My sister-in-law asked me to provide daycare her children while she goes to work instead of paying $1500 for daycare and leaving them in the care of people she doesn't know very well. She'll pay me $1000 a month to care the three of them. I don't have a business or license but wanted to know if I accept her offer will this income from self employment help me to refinance my house? I don't have any quarterly's or anything because I haven't accepted yet.
It's still tough finding even a decent job in Central California but I am trying. Thank you for your assistance in advance.
Kate Answers: Who can make monthly payments on the mortgage?
First of all, you are welcome.
As I have said before, Get-Your-Best-Mortgage-Rate.com is indeed a labor of love.
So thank you for your kind words. They are appreciated.
Mortgage Loan Approval
If mortgage loan approval
was a patchwork quilt, life would be a lot easier for homeowners today. Your lender could take your husband's income, combine it with your credit, and voila! Mortgage loan approval!
But in the end, a lender is responsible to ask who can make monthly payments on the mortgage. In other words, do all borrowers included on the mortgage application qualify for the mortgage.
Mortgage for Stated Income vs No Doc Mortgage Loans
Now onto your question. Most mortgage products' standard guidelines require two years of tax returns to document self-employed income for qualifying.
Another option, a mortgage for stated income, does not really apply as you don't have any self-employed income as yet to state on an application. A mortgage program which requires little to no documentation would be more up your alley.
Not that this is impossible by any means, but these home loans carry higher interest rates and closing costs. Plus contrary to the name, no doc mortgage loans have a seemingly endless number of hoops to jump through.
However I am always for thinking outside the box! That's why I offered this information on Seller Financed vs Stated Income Mortgages
to this first time home buyer in Bristol, Washington.
Refinancing Your Mortgage
I'm not clear whether you are refinancing to pay off your mortgage faster (with a 15 year fixed rate) or if your current mortgage payment is not affordable.
But either way, I assume since your mortgage is underwater, you are looking into HARP.
Besides HARP, Making Home Affordable has additional options. Go here to read Special Edition Making Home Affordable Options
to learn what is available to you under MHA.
One more thing. It's very important to prepare for a refinance by gathering your financial documents, complete, legible copies, wrapped up in a nice, neat package. Go here for Kate's Mortgage Information Planner
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