What Can and Cannot Be Financed? |

I got back from vacation at the beach yesterday, and after unpacking the car, turned on the Fox Business Chanel. I cannot remember the commentators name, but she was bantering with the guest about how difficult it is refinance a mortgage these days. One complained that she has a great credit score, but now can only refinance at 65% LTV (Loan-to-Value) rather than the 80% LTV that she is acustomed to. The guest huffed, “Yeah, and self-employed people can just hang it up. They can’t get financed”.

I am not sure where they are getting their information; but it is patently false. I am sorry that the news commentator has had a tough time refinancing, but a mortgage refinance in Atlanta is not that difficult.

First, it is easy to finance up to 90% of the value of the home, to $417,000; and up to 97.75% of the value of the home up to $346,240 with an FHA refinance. Now, news commentators make a nice living, so she may have a Jumbo loan. Assuming it is under $1.5MM loan amount, then it is quite possible to refinance at 80% of the home’s value.

Regarding self-employed borrowers, we used to finance nearly all of them with “stated” income, or non-verified income loans. It was just so much easier. Now, it’s back to old school of getting their tax returns and {drumroll} actually READING them. That’s right, we need to read tax returns again.

Even I had to brush up on how to read tax returns correctly. I had not done it in that long. But, like riding a bike, it was only a little uncomfortable to get back in the swing of reading tax returns for self-employed borrowers. And they are buying homes, refinancing homes, and getting approved for home mortgage loans, all around Atlanta.

But then, news outlets thrive on bad news, I suppose.