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Home Refinancing

2011 Income Documents

For closings after Jan 31, 2012 we will require all 2011 W2 forms to be on file.

If 2011 income is needed to qualify for a loan, then the taxes must be filled with, and processed by, the IRS and we must be able to obtain a 4506 Transcript from them. This is HUGE for borrowers that are self employed.

Tax deadline has been extended to April 17th this year. After April 17th 2011 tax returns will be required or a copy of the extension filled with the IRS. If an extension is filled, 2011 Income will not be used to qualify for self employed borrowers.

Odd Days’ Interest

Also known as “per diem” interest. This is money that is collected (sometimes refunded when rescission periods are involved) from a borrower at closing to synchronize their closing day with the loan payment due dates. This is required because interest accrues daily, if it wasn’t done, your first payment would be different than your normal payment amount.

Example: If you closed on the purchase of your new home on 8/15, the lender would collect 17 days of interest at closing (31 days in the month; interest is paid for every day that you have the loan; the only days where interest is not collected is the first 14 days of the month; 31-14=17). This closing date would, in turn, make your first payment (due 10/1) equal to all other payments (on a fixed note) because it was equalized.

Why would the first payment be due 10/1? Great question! Mortgage interest accrues in arrears; this means that when you make your first payment on 10/1, you are paying the uncollected interest for the month of September in the example above.