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A: Why use a Connecticut Mortgage Broker?
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3. Mortgage Process >>
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If you are incorporated, own at least 25% of the company and are paid a W2 wage, your CT mortgage provider will request a two year history of your W2’s and past two years of your corporate returns. They will average the past two years of the W2 income and look at the corporate returns primarily to see if you are earning money in your corporation.
If you are declaring a loss they will deduct this from your W2 income. When calculating your self employed income, if your income has declined from one year to the next, they will take the lower year’s income, not an average.
Assets
Assets are going to be a part of your CT mortgage, either with the down payment, closing costs, pre-paid fees and/or reserves. CT mortgage companies do not allow you to use a credit card at the closing . . . you will need an acceptable source of cash to close.
Seasoned Assets:
These are funds that have been in your account for at least 90 days. In order for cash to be accepted as your own funds, CT mortgage companies look for the cash to be seasoned.
If you show that your monies are being deposited regularly (such as from your paycheck), these funds can typically be used without being seasoned. If you have a large, out of the ordinary, deposit in your account over the past 90 days a CT mortgage company will question where these funds originated. For example, a credit card advance over 90 days prior to making your application for a CT mortgage is allowable.
Gifts:
A gift is a perfectly acceptable source of funds with the exception of an FHA Connecticut home loan. Here, you can use a gift from a friend, yet you must prove the friendship which can be easier said than done.
Most Connecticut home loans require your gift to come from an immediate family member. A gift must be verifiable. Just as you will need to prove these funds are seasoned, so will your family member.
There is another type of gift available today that works with FHA Connecticut home loans; gifts provided by non profit organizations. The way these programs work is when entering into a contract you would have the home seller agree to use one of these organizations. At close the seller would give the non profit organization a percentage of the sales price which you both agreed upon. Then this non profit organization would take typically 1% for processing fee and give the remainder to you as a gift.
Example: The asking price of a home is $100,000. You feel that the home is only worth $94,000, and the seller agrees to the price of $94,000. Using the Non Profit Organization, you adjust the sales price to $100,000.
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