Quote:
Originally posted by DineshG
Pramod, nice and interesting replies....
I think you and me will be best friend for a while. :-)
Dinesh
Thanks Dinesh,
But why friends for a while? We could be best friends for a long time to come.
I look forward to meeting you soon..
Cheers.
-----------------------------------------------------------------
Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
You bet!
Talk to you soon!
DG
Location: carl sagan's universe
Posted on: 07-05-07 16:00:36
Quote:
Originally posted by Pramod Chopra
That's where the ethics come in to play.
If you tell the lending institution / your mortgage broker about this or any other loan which is not reported in to the Credit Bureau, the lender / broker should ethically take this installment in to consideration for calculating the GDS / TDS ratio. However, if the 'investment loan' is taken after the mortgage approval / closing then it would not affect you in any way.
You can plan things accordingly.
Absolutely, if you have an investment loan before you take a mortgage and your service charges are say $250 a month on this, in your self-interest, it should be reported to the LI that advances your mortgage, 'cos if you don't the LI will be oblivious to that fact. Even if you have a self-paying investment loan where the current dividends pay for the carrying charges, in the event dividends are scrapped you will be straddled with that cost, so in your self-interest you should take that into a/c and report it to the LI. There are many ramifications.
As to the ethics statement......????
Just recently I did a mortgage for a car mechanic. According to his NOA, his income showed was X which qualified him for a Y amount of mortgage. But his need was Y +Z. The guy at the LI, not I nor anybody else, looked at me and said
"OK this guy says he makes X. 'Cos he is a car mechanic the odds that he makes X + 15% of X is high, so let's use that as a base. Based on that does he qualify for Y +Z? Yes he does!
So he got the mortgage he desired. nO JOB LETTERS , no nada, simple papers and simple deduction on part of the LI.
Would you consider that unethical? Just an academic question. You do not have to answer if you do not wish to.
Was the LI hungry for business, or was it based on the logical assumption that a car mechanic makes more than what he declares, based on industry averages and polls?
Anyway, just thought I'd let you know. And the LI in question is a well known bank.
Quote:
Originally posted by investpro
Quote:
Originally posted by Pramod Chopra
That's where the ethics come in to play.
If you tell the lending institution / your mortgage broker about this or any other loan which is not reported in to the Credit Bureau, the lender / broker should ethically take this installment in to consideration for calculating the GDS / TDS ratio. However, if the 'investment loan' is taken after the mortgage approval / closing then it would not affect you in any way.
You can plan things accordingly.
Absolutely, if you have an investment loan before you take a mortgage and your service charges are say $250 a month on this, in your self-interest, it should be reported to the LI that advances your mortgage, 'cos if you don't the LI will be oblivious to that fact. Even if you have a self-paying investment loan where the current dividends pay for the carrying charges, in the event dividends are scrapped you will be straddled with that cost, so in your self-interest you should take that into a/c and report it to the LI. There are many ramifications.
As to the ethics statement......????
Just recently I did a mortgage for a car mechanic. According to his NOA, his income showed was X which qualified him for a Y amount of mortgage. But his need was Y +Z. The guy at the LI, not I nor anybody else, looked at me and said
"OK this guy says he makes X. 'Cos he is a car mechanic the odds that he makes X + 15% of X is high, so let's use that as a base. Based on that does he qualify for Y +Z? Yes he does!
So he got the mortgage he desired. nO JOB LETTERS , no nada, simple papers and simple deduction on part of the LI.
Would you consider that unethical? Just an academic question. You do not have to answer if you do not wish to.
Was the LI hungry for business, or was it based on the logical assumption that a car mechanic makes more than what he declares, based on industry averages and polls?
Anyway, just thought I'd let you know. And the LI in question is a well known bank.
There is nothing new or 'unethical' in the example given by you as most of the lending institutions including big banks and the insurers like CMHC and GENWORTH have this product where in they will bump the income shown on Line 150 (2 year average) by 15% for qualifying the borrower for the mortgage as they all know that the 'self employed' people have so many expenses to write off. And mind you this product is for most of the 'self employed' people whether Car-Mechanic, Truck Driver or a Financial Planner for that matter if every thing else including credit is acceptable to the lender and the insurer, if applicable. I have done mortgages under this product for my self employed clients.
-----------------------------------------------------------------
Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Location: carl sagan's universe
Posted on: 07-05-07 23:05:10
The car mechanic was an employee. For self-employed there are products available also with 40% above declared income.
Ah, yes'nothing new under the sun' !
The simple replies to the queries by Pramesh
Bullet 1. From certain institutions the loan does not show up at all let alone differently. It affects your credit history it that a 'ping' from the institution giving you the loan will show up and bring down your score by perhaps 3-5 points which you recuperate once you make your monthly installment payments on your credit card or line of credit.
Bullet 2-If your investment loan is from such an institution as stated above the mortgage LI will not know that you have one so it will not affect the LI's assessment of your institution. The LI might wonder why the hit was made but if your score is good, it won't bother the LI.
The 3rd bullett- as I undersand it, if you are borrowing from an institution that declares it as a lien, (I don't know of any- perhaps you can enlighten the forum as to which institution does that) then it will definitely affect your credit history as it will show up on your credit bureau.
Plain and simple. Leave the ethics alone. How it came into the picture is beyond me.
