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Pls help with financials

Discussion in 'Loan Modification' started by M1414C, May 16, 2010.

  1. M1414C

    M1414C LoanSafe Member

    Please help me with my financials. I am trying to get my 1st mortgage refinanced back to a 15 year. We have only 3 years left on a 10 year but can't keep up the high payments. of $3818.00 I think I have it down to 31%. Can someone check it out for me?

    Bank of America loan # xxxxxxx $3818.00
    Bank of America loan # xxxxxxxxxxx 475.35
    Bank of America loan #xxxxxx 682.64
    Auto loan # xxxxxxxx 532.68
    Auto insurance 220.00
    Nstar Electric 140.00
    Phone 135.00
    Charges Chase & Amex 375.00
    Chapter 13 Trustee payment 200.00
    Taxes & Insurance 800.00
    Food 600.00
    Total-------------------------------------------------------------------
    TOTAL $7979.67

    xxxxxxxxxxxxxxx Gross Weekly Income $1866.00
    Gross Monthly Income 7464.00


    We would like to modify Loan 874881816 to a 15 year term with a approximate payment of $1436.41.
    Do I have to include my husbands overtime? It can add an additional $600.00 to his check when available?
  2. SurfwhenUcan

    SurfwhenUcan LoanSafe Member

    I like your creativity on what you want to request of the bank. However, I see a couple of challenges.
    First, if you are paid weekly, Gross and Net are calculated WEEKLY PAY X 52 / 12 (your Gross pay is actually $8086)
    Second, with 3 years left on a 10 yr note, I am betting you are current and have equity. If so, expect a considerable amount of resistance on the part of the lender. By being current, you are telling them you can afford the payment. The lender's litmus test for proving you are actually "Living the Hardship" is to see that you are 60+ days late and in imminent default. If you have equity and run into trouble with payments, the lenders list of remedies for you, in order of priority are: Sell, Short Sell, Modification, Deed in Lieu & Foreclose, in that order. When you go to the lender with equity and ask for a mod, they feel you are skipping two steps.
    Third, Gross income is usually used to calculate the HAMP program and % of income for your final payment (Chase for example would have your final payment more like 38% - 40% of your income). Once you submit financials, the lender will use your NET to calculate affordability. That is when they offset NET with all of your living expenses, etc. along with whatever new payment they are going to give you. Don't fall into the trap of showing the bank you cannot afford a modification by letting them calculate a deficit each month when they use your net income.

    Your requested payment of $1436.41, while optimistic, probably can't happen. The reason? Based on your gross income of $8086, a HAMP program payment would be $2506.66. With the bank using that as a baseline, you are requesting $1100 less than this. They won't go that far.

    What I recommend is research other threads on this site related to your lender and "Traditional Modifications" or "Alternative Mods" That is what you need to go for.
  3. imlars

    imlars LoanSafe Member

    I am not very familiar with refinancing, but I do know that
    in order to refi, you must be current on your mortgage, and have no payments missed within the last 12 months. In other words, you must have very good credit.
    This is why many borrowers end up requesting a review for a loan modification, they do not qualify for a refi.

    If your gross income is $7464, you probably net less than $6000 month. Subtracting the expenses from the net income leaves you with an almost $2000 deficit each month? These are not good numbers, not good at all.
    Do yourself a favor, go to your lenders website and read! Usually all of the necessary forms, required document list and instructions on how to request work out review are there. You do not want a monthly deficit, and you do not want any more than a $150 monthly surplus if you want to qualify.
    For the HAMP, which only applies to Fannie Mae and Freddie Mac backed loans, 31% of your gross income of $7464 would make your mortgage payment, homeowners insurance, taxes and HOA fees if they apply, total $2314 per month. $2314 per month minus the $800 taxes and insurance would make your actual mortgage payment $1514. Not too far off from what you were hoping for.
    Just make sure to use your lenders forms, and follow all instructions to the letter.
    Modifications generally lower the original payment by reducing the interest rate a couple of points and/or extending the term of the loan up to 40 years. But, your situation seems to be a little different than most. Your lenders website should be able to help you, and check out makinghomeaffordable.gov for more information about HAMP/MHA.
  4. lisasxr

    lisasxr LoanSafe Member

    Are you looking to refinance or modify? They are very different creatures.
    ASSUMABLY (that could be big trouble for me! LOL) you have some equity if your 7 yrs into a 10 yr loan. Thusly, if your current and have no lates in the last 12 months you could refinance the loan (are you looking to refinance with cash out for other debts, combine a 1st and 2nd, or just change the rate/terms on the 1st)

    Front end DTI (for a refinance) should be around 30%; back end DTI 45-50% (DTI only looks at mortgages, installment loans and revolving charges (sometimes collections) - it does not account for monthly living expenses.

    If your hubby's Overtime is guaranteed for any certain number of hours per year, then include it ---- If there is no guarantee of overtime, do not include it. Get approved on the smallest amount of income you may receive (you'll have the greatest chance of making the payments)

    (I have built a monthly budget in Excel for all our bills. It's very simple. I based the total income for each pay period on the smallest check DH may receive - I'm salaried so it's the same every pay period. This allows me to pay bills when we get paid, confirm that the checkbook shows the proper amount of funds for food, gas, etc. Then when DH gets overtime we are able to add fun things or pay down cc debt)
  5. inthegarden

    inthegarden LoanSafe Member

    I would like to create something like this. would you be willing to share a template?
  6. M1414C

    M1414C LoanSafe Member

    Unfortunateley I can't refinance. When I called last August to refin we had never been late or missed a payment but they weren't interested. Now we are behind 8+ months and looking to modify . Maybe I'm using the wrong terminology. But can't I get a loan mod that will lower the rate and put it back out to a 15 year mortgage. Last week my negotiator told me I was all set and then Friday..bingo new negotiator, looking for ALL new documents....aaaaghgahghg Should I change anything before sending new financials?
  7. SurfwhenUcan

    SurfwhenUcan LoanSafe Member

    I'm still assuming your income is paid weekly as you stated, but if you are basing all of your ratios on $7464, you may be in for a surprise when they actually underwrite the file - your Gross income is $8086. If you are paid bi-weekly or on the 1st and 15th, the number will be different again.

    In answer to your question about 15 years terms, the lenders can't get anyone to make good on 30 and 40 year terms so having them consider a 15 year term is unlikely but you can try. Just because it is a 30 year term doesn't mean you have to pay over 30 years, you can always add to the payment.

    Also, do you mean "Negotiator" or are you talking to a bank rep. The two are very different and most people think the person they talk to on the phone is the negotiator. This is usually not the case.
  8. lisasxr

    lisasxr LoanSafe Member

    OK - loan modification.

    When submitting financials for the modification, I would not include the OT (unless it was guaranteed). (PS - I did not include it as DH was told no OT, but he has been able to get a few hours here and there)

    Have you identified how your budget will look based on NET income if you were to have your loan modified? You need to do this as well, because if the modified payment doesn't put you in a surplus situation based on net income, it's really of no use to go through the motions.

    (PS - I also got as detailed as possible in my budget (because I had the information handy) - Utilities (including gas, water, trash/sewer, electric), Auto fuel, Prescriptions, Auto repair, Clothing, Gifts, Cable, Internet, Cell Phone, Groceries (including sundries), Childcare, Health Insurance, 401K withholdings, 401K loan repayment, etc etc etc.)


    inthegarden - yes I can share the template. send me an email & I will forward to you. chrisandlisa1998@yahoo.com

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