Posted by JT-IN on August 05, 2008 at 05:53:20:
Kristine:
I try to use std conv ratios as to income/pymt and total DTI ratios. Of course I am flexible on these and will exceed the max ratios (based on actual income, not necessarily documented income) as long as they are capable of and seem to be moving in the right direction. It is all about what they will look like 1 yr out, or 2 yrs out in a 2 yr agreement, sans lightning striking such as winning the lottery or having absolutely everything fall into place perfectly; as we know it never does.
What is sometimes necessary is retraining the T/B… Teaching them how to document, keep records, show proper income, etc. It is almost like rebuilding credit, but in the cash out of pocket person, it is a matter of establishing income, credit, etc. Becoming something other than transparent… as to credit and income. Some simply cannot make the transition because it is a life changer. They must really want to get the option exercised enough to do things differently. Maybe a 50/50 chance of transition, based on my experiences.
JT