Articles by Dani Hernandez

Ask the Underwriter: How will the government shutdown affect borrowers seeking a mortgage?

You ask, and the underwriter answers
[Expert Commentary] By continuing to hold funding of the federal government hostage to his demand for a border wall, President Donald Trump has successfully built a (hypothetical) wall to keep borrowers from realizing the American dream of homeownership. Here's how each type of mortgage is being affected by the government shutdown.
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Ask the Underwriter: A borrower qualifies using W-2 income, do I include the self-employment loss?

You ask, our LendingLife underwriter answers
Question: I have a borrower who is looking to purchase a new home. They are employed by a large corporation and qualify for the loan using only their W-2 income. However, the borrower has a Schedule E loss on their tax returns from Self-Employment through an S-Corporation. If the borrower qualifies using only their W-2 income, do I need to include the self-employment loss in their debt-to-income ratio? Click for the answer!
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Ask the Underwriter: Are DACA recipients eligible for FHA loans?

Here are the requirements
On Wednesday, a federal judge ruled that the protections for Deferred Action for Childhood Arrivals program recipients must stay in place and that the government must resume accepting new applications for the program. This is great news for the Dreamers! But what does it mean for DACA borrowers who are looking to buy a new home this spring? This week, Underwriter Dani Hernandez provides a walk through of the FHA’s guidelines and explains the documentation needed to get your DACA borrowers into a new home using FHA financing.
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Ask the Underwriter: Can the borrower’s cash to close be less than the FHA minimum required investment amount?

There's a loophole
Ask any mortgage professional and they will tell you if you use an FHA loan to buy a new home, you must make a Minimum Required Investment equal to 3.5% of the purchase price or appraised home value (whichever is less). Most of these "experts" will also tell you this means the minimum down payment and cash due from the borrower at closing must be equal to 3.5%, and they will insist your out-of-pocket cost cannot be any less. And this misconception is so widely believed that it caused a bit of panic in my office this week. Read on to find out about how a little loophole helps avoid this problem...
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