COMPENSATING FACTORS TO OVERTURN A MORTGAGE DENIAL
Documentation- Accumulated Savings
• The borrower has demonstrated an ability to accumulate savings, and a conservative attitude toward using credit.
- Compensation or Income Not Reflected in Effective Income
- Down Payment
• The borrower makes a large down payment of 10 percent or higher toward the purchase of the property.
- Housing Expense Payments
- Minimal Housing Expense Increase
• There is only a minimal increase in the borrower's housing expense.
- Potential for Increased Earnings
• The borrower has a potential for increased earnings, as indicated by job training or education in his/her profession.
- Previous Credit History
• A borrower's previous credit history shows that he/she has the ability to devote a greater portion of income to housing expenses.
- Primary Wage-Earner Relocation
- Substantial Cash Reserves
- Substantial Non-Taxable Income
• The borrower has substantial non-taxable income. This applies if no adjustment was previously made when computing ratios.
Senior Loan Officer
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