Financial Rant #826

*Warning*

The following rant is not particularly funny. It’s a real, honest-to-crappiness rant about mortgages and really, how funny can one make a mortgage rant sound? It’s also meant to help inform other self-employed individuals like me who might be looking into purchasing a home. So, if you read this post be prepared for informative silliness, not a funny story. But don’t worry, I’ll be funny tomorrow. Promise. Thank you for your indulgence.

Mortgages suck anal wart juice.

Not the paying of mortgages, either. I’m talking about the actual procuring of a mortgage so that one might purchase a home. How the heck do people do this? I mean, far be it from me to claim poverty, but according to the mortgage brokers I’m talking to, the MightyWife and I might as well be living out of a cardboard box in the gutter of a trailer park! Even though we’ve got more than the necessary 20% down payment in cash in the bank, we’re still considered a bad loan candidate because we’re both self-employed and according to our taxes of the last three years we make diddly-squat.

Apparently, our accountant is so good we should fire him.

Luckily (heavy sarcasm) there is something called a No Income Verification Loan which seems tailor made for self-employed people like us. Basically, you apply for a mortgage without documenting your income and the loan approval is based on your liquid assets and the value of the property you’re looking to purchase. There are only two drawbacks I can see to such a mortgage;

1. Higher interest rate. Luckily we’re only talking about a quarter to a half percent difference and not a few points. Trust me, a half percent doesn’t sound like much, but after 30 years it can mean the difference between community college and Ivy League for your kids.
2. Increased asset qualifications. Basically, this means that you need to have more cash available to you than someone who is applying for a regular mortgage. If you need to put down 20% for a regular mortgage then be prepared to have 25-30% available to you when applying for a NIV loan. You might not need to put down all 25-30% on the home, but the financial institution loaning you the money will want to see that you have enough to survive on past the initial down payment.

All in all, it’s not the worst thing in the world, but it is annoying. There are other loans out there similar to NIVs that are called No-Doc loans. They require absolutely no paperwork, just a statement from the borrower about how much they earn in a year with no checking of financial records, but you will have to pay about 1 percent more on the loan and possibly put down 25-30%.

If you’re like me and want to find out more about these loans, try here, here and here.

And now that I’ve spent so much time on this financial crap, I think I need to play some Prince of Persia to cleanse myself. Or maybe I should redesign this site for its April unveiling…

Nah! Miss Ex-Boxx here I come!