Lesson 5: Bank Statement Loans — When Tax Returns Don’t Tell the Whole Story

For many self-employed borrowers, there can be a significant difference between taxable income and the actual cash flow generated by their business. That isn’t necessarily a problem with the business. It may simply be the result of how the tax code works. Business owners often legitimately reduce taxable income through ordinary business expenses, depreciation and…

“My Credit Scores Are Over 820. Why Does My Mortgage Lender Say 744?” It’s a question that can be surprising—and frustrating—for someone preparing to buy or refinance a home: “When I check my credit, my scores are above 800. Why is my mortgage qualifying score only 744?” Here’s a real-world example: A borrower saw VantageScores…

Government Lending — FHA, VA and USDA Explained Government-backed mortgage programs are among the most misunderstood options in residential lending. Some borrowers assume FHA is only for first-time homebuyers. Some eligible Veterans never seriously consider VA financing because they have heard that VA loans are difficult, sellers don’t like them, or the property won’t qualify.…

“But someone in the building just got a conventional loan last year.” I’ve heard variations of that statement many times when financing a condominium. A unit owner refinanced. A neighbor purchased a condo with 20% down. Fannie Mae or Freddie Mac financing was apparently available. So when the next unit comes on the market, everyone…

A successful business. Strong income. Excellent credit. Money in the bank. And an attractive loan proposal is already in hand. What could possibly go wrong? For one of my clients, the answer was something that had happened approximately 15 years earlier. This is one of my favorite Mission Impossible Loans because it demonstrates an important…

Sometimes the Lowest Price Isn’t the Biggest Opportunity…or the Biggest Risk. Recently, a first-time homebuyer contacted me about a condominium that immediately caught their attention. The listing price was attractive, the monthly HOA dues were only $270, and although the property needed cosmetic updating, the buyer was handy and eager to build sweat equity. On…

Why Good Borrowers Get Declined — And Why Another Lender May Say Yes Have you ever wondered why one lender declines a borrower while another lender approves the exact same transaction? It happens more often than many homebuyers and real estate professionals realize. A borrower may have excellent credit, substantial income, significant assets and a…

Recently, I visited a 6-unit San Francisco condominium building while on Broker Tour. As I walked through the property, something caught my attention: the building had an exterior staircase and railing elevated more than six feet above the ground. Given the increased attention being paid to exterior elevated elements in California condominium buildings, I asked…

For many real estate investors, one of the biggest obstacles to selling an appreciated property isn’t finding a buyer. It’s the tax consequences of selling. An investor may have owned a rental house, apartment building, commercial property, or other investment real estate for years—or even decades. Commercial Real Estate Loans Archives – Steven Hook, San…

A condominium buyer can have excellent credit, strong income, plenty of assets, and a substantial down payment—and still run into a financing problem. The reason may have nothing to do with the buyer. It may be the condominium project itself. Fannie Mae and Freddie Mac have recently made significant changes to their condominium project review…