All Posts Tagged With: "back"
How VA’s Residual Income Factor Keeps Vets Out of Foreclosure
There are multiple reasons why VA loans continue to have the lowest rate of foreclosure of any major lending program. Residual income is a big one. This is a unique credit and underwriting guideline that applies only to VA loans. At the outset, it’s important to differentiate residual income from a debt-to-income ratio. Unlike conventional [...]
12Apr2011 | Chris Birk | 0 comments | Continued
What’s A Cash-Back Transaction?
It is sometimes claimed that it’s possible to buy a home and receive both the house a substantial amount of cash at closing. For example, a home will be “sold” for $100,000. The deal will be financing with a 95 percent loan-to-value mortgage. However, the seller will provide a $15,000 certificate of deposit to the [...]
30Aug2008 | Peter G. Miller | 0 comments | Continued
What Are “Front” and “Back” Ratios?
Different loan programs use different calculations, or ratios, to qualify would-be borrowers. The “front” ratio is generally equal to your monthly costs for principal, interest, property taxes, and property insurance (what lenders call “PITI”). The “back” ratio includes the front ratio plus all regular monthly costs such as credit card payments and auto payments. For [...]
28Aug2008 | Peter G. Miller | 0 comments | Continued
What are the pros and cons of owner financing?
There are several potential pros and cons for sellers, at least. You will get a steady monthly income. You won’t have to worry about the buyer qualifying for financing, or as much financing. Tax obligations may be stretched out in certain cases — see a tax pro for details. But, it could also happen that: [...]
26Aug2008 | Peter G. Miller | 0 comments | Continued
What’s a seller “take-back?”
A seller “take-back” works like this: Imagine that a home is worth $300,000 and has an assumable $100,000 mortgage. Instead of going to a lender, the seller “takes back” a note, secured by the property. For example, the seller might take-back a note for $270,000 if you will put up $30,000 in cash. In other [...]
26Aug2008 | Peter G. Miller | 0 comments | Continued
My elderly parents want to sell us their house and then rent it back. Is this a good strategy?
This gets us to a ghoulish discussion, but it is probably best for them to will the property to you — you would then receive the property at its stepped-up basis at their death. Alternatively, if you received the property as a gift, there might be gift taxes for them and significant capital gains taxes [...]
26Aug2008 | Peter G. Miller | 0 comments | Continued
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