Hard Intelligence at work

Loan modification is starting to be a very common manner for individuals to keep their homes by negotiating the terms of the mortgage with you lender. However, prior to being approved, you need to demonstrate that you can repay the modified mortgage with your current income.

If you are self-employed, it could be hard to demonstrate your earnings when making your case to the lender. This may be so for many distinct reasons. Regardless, lenders must have some kind of proof that you could pay back the mortgage.

In order to solve this problem, you can ask your accountant about a financial statement. The financial statement should cover the last six months. It is important that the financial statement is filled out by your certified accountant because it will have instant credibility.

After you get the final amount from your certified accountant, you consider the amount as a regular paycheck. You need to plug in that number to calculate the debt-to-income ratio which is the critical point of consideration to determine if the loan modification will be obtained.

When you use the value in the financial statement, you discount the weight of employees, rentals, etc. Only the basic number showing your present income is seen in this statement.

Once you have done this, give this value to the bank. The number won’t be “audited” or “reviewed”. The lender can use it as documentation as long as it is prepared by an accountant.

This is usually all the proof lenders need. Banks will take this document as demonstration of income when the individual is self-employed. Since banks will take this statement as proof of income, they need to make sure that this letter comes from an accountant.

Remember that lenders expect to get some kind of proof of earnings before offering the loan modification. By providing the lender with the financial document done by your accountant, banks will obtain the proof they need to give you the mortgage modification.

Tags: Banks, Certified Accountant, Credibility, Critical Point, Debt To Income Ratio, Demonstration, Distinct Reasons, Earnings, Financial Document, Financial Statement, Lenders, Loan Modification, Loan Modification Programs, mortgage, Mortgage Modification, Particulars, Paycheck, Proof Of Income, Self Employed, Six Months