A few weeks back I read a quote on LinkedIn that was brilliant…
“The marketing draws your clients in, your craftsmanship keeps them”
I personally have tried out many underwriting programs that have fantastic marketing, to only come to realize that the program itself did not quite live up to the hype of the marketing.
For UberWriter our “Craftsmanship” is building the number one underwriting resource in the mortgage industry by offering software tools, continuing education, and consulting. Anytime we get feedback that a client is going outside of our Mortgage Income Analysis tool to determine an income or calculation, our attitude is “game on” and we get to work on the tool needed.
Many underwriters are familiar with VA’s residual income calculator and how it applies to veteran loans. Most LOS program’s have a “pretty good” calculator for VA loans, but after surveying our clients and seasoned consultants we found that most tools were lacking some key items. In addition, if they wanted to use the residual for other loan types (such as FHA loans) they could not access the calculator since the loan type was not VA. Let me show you our calculator and how we addressed those missing items.
Providing a single box for all incomes for all borrowers simply does not cut it. Our calculator allows for taxable, non-taxable, rental income, and grossed up adjustment as separate entries for each borrower to clearly demonstrate the different income sources to qualify. By separating these income types the underwriter can more accurately determine the actual DTI (using all income types), the taxable amount (only using taxable income and rental income), and the residual income to qualify (using taxable, non-taxable, and rental income, but not grossed up incomes).
Monthly Housing Expense
We broke out each possible component of the PITI and added the option of entering the yearly income so that the calculator would break it down to an accurately monthly amount. This save the underwriter time and lowers the possibility for math errors versus standard calculators.
Monthly Income Taxes
When you enter the borrower’s income our calculator pulls the latest federal and state income charts to suggest the rate to use for the income tax estimation. Feel free to use our numbers or follow your companies process or charts to determine the proper tax amounts. Either way to the penny accurate numbers for the residual income calculation.
Adjustment to required residual income
One of the more challenging requests to add a feature on the tool to allow the client to “adjust” the required amount of residual income needed. For example, if your borrower is active duty then the residual income is adjusted down 5%. Some clients use this residual for other loans then just VA and wanted to be able to adjust the required residual up or down based on risk profile. For example, a manual downgrade FHA loan there was a 20% higher residual income threshold needed to qualify for one of or best clients. To handle this we addeded an adjustment calculator that can raise or lower the residual income requirement by +/-20%.