A borrower provides a lease agreement showing rental income of $2,500 per month, but the property has been vacant for the past 3 months. How should this rental income be treated?
Correct Answer
C) The rental income cannot be used due to current vacancy
Current vacancy typically disqualifies rental income from being used for qualifying purposes. Lenders generally require evidence of current rental income or a signed lease with security deposit to demonstrate the property is generating income. A 3-month vacancy indicates the property is not currently producing qualifying income.
Why This Is the Correct Answer
Current vacancy typically disqualifies rental income from being used for qualifying purposes. Lenders generally require evidence of current rental income or a signed lease with security deposit to demonstrate the property is generating income. A 3-month vacancy indicates the property is not currently producing qualifying income.
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A borrower has a 30-year fixed-rate mortgage at 4.5% with 25 years remaining. They want to refinance to a 15-year fixed-rate mortgage at 4.0%. The monthly payment will increase by $400. Under what circumstances would this refinance meet the tangible net benefit requirement?