• No or low payment shock: minimal increase in housing expenses, or current rent is comparable to proposed PITI (100% increase in payment or less).
• Conservative attitude toward the use of credit and ability to accumulate savings
• Previous credit history verifies that applicant has the ability to devote a greater portion of income to housing expense. Many low income or high cost area applicants already pay a substantial amount for rent or housing and are successful.
• Employment history: Two or more years in current position is excellent, however underwriters should consider applicants who change positions frequently to better their financial position. Underwriters should give more credence to a history of continuous employment, (no gaps due to multiple terminations, etc.).
• Additional compensation/income: Public benefits, food stamps, potential commissions, bonus payouts, and additional part time employment that lacks a stable history may not be reflected in the repayment income, yet this additional income will have a direct effect on the ability to successfully repay the mortgage obligation.
• Cash reserves available post closing.
• Potential for increased earnings and career advancement, as indicated by job training or education in the applicant’s profession.
• Trailing spouse income: Home is being purchased as the result of relocation of the primary wage-earner. The secondary wage earner has an established history of employment and is currently seeking or expects to return to work and there are reasonable prospects for securing employment in a similar occupation within the new area.
• Low TD: A low TD by itself does not compensate for a high PITI ratio, however when other strong compensating factors are present a low TD ratio should be viewed as a positive mitigating factor.
David Marsh - Rocky Mountain Mortgage Specialists, Inc. - NMLS #157675 - 888-851-1380