How are income limits determined when applying for state sponsered mortgage loans?

[PingSpike]

I've been doing some research lately, trying to wade through the plethora of things involved in buying our first home. There's a state agency (vhfa.org) that offers mortgage loans with good interest rates for first time home buyers, with restrictions. The purchase price limits are well over what we're looking for, but the income limits may be a problem.

My wife and I both got new jobs. Last year we were well under the limit. She just started a new better paying job, and if we're working with the period of jan 1st to december 31st we should still be just under the limit. But next year, we'll be over.

What are these limits usually based on? Last year's income? W2? Projected yearly income based on our current jobs?

I'll probably have to speak with one of the local lenders, but I've noticed a lot of government programs have these limits and wondered if anyone knew how they usually determine whether you apply to the income limits.

 

[PingSpike]

No one has any idea on this?

 

[patentman]

Originally posted by: PingSpike
I've been doing some research lately, trying to wade through the plethora of things involved in buying our first home. There's a state agency (vhfa.org) that offers mortgage loans with good interest rates for first time home buyers, with restrictions. The purchase price limits are well over what we're looking for, but the income limits may be a problem.

My wife and I both got new jobs. Last year we were well under the limit. She just started a new better paying job, and if we're working with the period of jan 1st to december 31st we should still be just under the limit. But next year, we'll be over.

What are these limits usually based on? Last year's income? W2? Projected yearly income based on our current jobs?

I'll probably have to speak with one of the local lenders, but I've noticed a lot of government programs have these limits and wondered if anyone knew how they usually determine whether you apply to the income limits.

Many government programsn are based on adjusted gross income over the past 12 months. E.g., if you make 30k/year on January 1, and Then get an increase to 40k/year on July 1, your adjusted yearly income for that year would be $35k for the purpose of the government program. My brother lives in low income housing and that is how his income is determined for the purpose of the program

Most traditional mortgage loans are based on a 12 month assessment of earnings based on your salary at the time of the loan. E.g., if your salary is 40k/year when you apply for the loan, the amount you can borrow will be based on the assumption that you make 40k/year. It doesn't matter if you get a new job and make 100k later in the year, unless you can show proof that you will earn that much at a specified time (I had to do this for my home loan, as once I graduate from school I will make 30% more money than I do now, but I had to get the loan before I graduate)

What are these "good" rates and deals you speak of?

 

[akubi]

you can get a divorce, do the mortgage, then get remarried

 

[waggy]

have you checked into some HUD has? my sister is on one where if you buy in a smaller town (first time buyer and income limited) you can get reduced interest (lowest is %1) and no points etc.

they also have others. there is a huge list of programs offered. call a realtor and ask.

oh and as patentman said they go over wages on the last 12 months (up to 4 years) but since you say you are dealing with state/fed loans it really depends on what they require.

 

[PingSpike]

Originally posted by: patentman

Originally posted by: PingSpike
I've been doing some research lately, trying to wade through the plethora of things involved in buying our first home. There's a state agency (vhfa.org) that offers mortgage loans with good interest rates for first time home buyers, with restrictions. The purchase price limits are well over what we're looking for, but the income limits may be a problem.

My wife and I both got new jobs. Last year we were well under the limit. She just started a new better paying job, and if we're working with the period of jan 1st to december 31st we should still be just under the limit. But next year, we'll be over.

What are these limits usually based on? Last year's income? W2? Projected yearly income based on our current jobs?

I'll probably have to speak with one of the local lenders, but I've noticed a lot of government programs have these limits and wondered if anyone knew how they usually determine whether you apply to the income limits.

Many government programsn are based on adjusted gross income over the past 12 months. E.g., if you make 30k/year on January 1, and Then get an increase to 40k/year on July 1, your adjusted yearly income for that year would be $35k for the purpose of the government program. My brother lives in low income housing and that is how his income is determined for the purpose of the program

Most traditional mortgage loans are based on a 12 month assessment of earnings based on your salary at the time of the loan. E.g., if your salary is 40k/year when you apply for the loan, the amount you can borrow will be based on the assumption that you make 40k/year. It doesn't matter if you get a new job and make 100k later in the year, unless you can show proof that you will earn that much at a specified time (I had to do this for my home loan, as once I graduate from school I will make 30% more money than I do now, but I had to get the loan before I graduate)

What are these "good" rates and deals you speak of?

I'm still shopping around on what's good and isn't, but this also has some tax breaks at closing.

interest rate: 5.35%
points: 2
APR: 5.53%

5.50%
1
5.59%

5.65%
0
5.65%

 

[PingSpike]

Originally posted by: waggy
have you checked into some HUD has? my sister is on one where if you buy in a smaller town (first time buyer and income limited) you can get reduced interest (lowest is %1) and no points etc.

they also have others. there is a huge list of programs offered. call a realtor and ask.

oh and as patentman said they go over wages on the last 12 months (up to 4 years) but since you say you are dealing with state/fed loans it really depends on what they require.

I may have glanced over HUD yesterday I found we were well outside the limits, but I can't remember. I'll have to look at them again.

 

[cavingjan]

I would suggest going and getting a preapproval from a mortgage company that offers these programs and talk to them.

Then you know what you can afford (I wouldn't go for more than 80% of what they offer) and they can give you the pros and cons of all the programs.

 

[PingSpike]

Originally posted by: cavingjan
I would suggest going and getting a preapproval from a mortgage company that offers these programs and talk to them.

Then you know what you can afford (I wouldn't go for more than 80% of what they offer) and they can give you the pros and cons of all the programs.

Yeah, I guess that may be the next step. I'm not entirely sure if I want to start house shopping any time soon though. I just want to know if this program is even going to be available to me if I do decide to take the plunge later this year.

 

[mzkhadir]

google is your friend: http://www.huduser.org/DATASETS/il.html