At MortgageDepot, we’re at all times looking out for methods to assist our shoppers maximize their borrowing potential. One often-overlooked alternative lies in the usage of auto allowances as extra revenue. Do you know that typical loans now enable the complete use of auto allowance as extra revenue? It’s true, and it could possibly make a major distinction in your mortgage utility.
Simplified Calculations for Auto Allowance
Each Fannie Mae and Freddie Mac have streamlined the method for incorporating auto allowances into your revenue calculations. Gone are the times of sophisticated formulation and complicated calculations. Now, the complete quantity of your auto allowance, because it seems in your paystub, might be added to your revenue. This transformation simplifies the method and may probably enhance your borrowing energy.
Necessary Tips to Preserve in Thoughts
Whereas the brand new tips are extra easy, there are nonetheless some necessary necessities to concentrate on:
1. Two-Yr Historical past of Receipt: Each Fannie Mae and Freddie Mac require that you’ve a two-year historical past of receiving the auto allowance. This ensures that the revenue is secure and dependable.
2. Freddie Mac’s Extra Requirement: Along with the two-year historical past, Freddie Mac additionally requires that there’s a three-year continuance on the Verification of Employment (VOE). Because of this your employer should confirm that you’ll proceed to obtain the auto allowance for at the very least the following three years. Fannie Mae doesn’t have this extra requirement.
3. Revenue Solely, Not Deductible: It’s necessary to notice that the complete quantity of the auto allowance might be added as revenue solely. It can’t be deducted out of your auto fee. This distinction is essential for precisely calculating your complete revenue.
How This Advantages You
Incorporating your auto allowance as extra revenue can have a number of advantages:
- Elevated Borrowing Energy: By including the complete quantity of your auto allowance to your revenue, it’s possible you’ll qualify for a bigger mortgage quantity.
- Simplified Course of: The elimination of sophisticated formulation makes it simpler to grasp and make the most of your auto allowance.
- Flexibility with Lenders: With each Fannie Mae and Freddie Mac adopting these tips, you’ve gotten extra choices when selecting a lender.
At MortgageDepot, we’re dedicated to serving to you navigate the mortgage course of with ease. When you’ve got an auto allowance and are contemplating a standard mortgage, our staff of specialists is right here to information you each step of the best way. Contact us at present to be taught extra about how one can leverage your auto allowance to realize your homeownership goals.