Intelligent lending information from Jamie Meyers of Golden 1 Credit Union
As a lender in the Bay Area, there are two things that I associate with the date April 15th.
Apple employees have their stocks vest, so they all have more money available for a down payment than they did before April 15th. Apple only vests twice per year (April 15th and October 15th), and many of their employees are significantly compensated by RSU Income, so this can actually make a big difference in some of their approvals.
It’s tax filing time! This can be a blessing or a curse.
The Blessing: many self-employed borrowers had a horrible year in 2020 because of Covid. Since lenders look at the last two years of tax returns when calculating income for self-employed borrowers, it is only after 2022 tax returns are filed that we no longer have to consider 2020 in the income calculation. If you had any self-employed borrowers that couldn’t get approved previously, it may be worth it for them to apply for pre-approval again if their income has been increasing since 2020.
The Curse: our clients may owe money – possibly a lot of money – when they file their taxes. I have a client in contract right now who learned last week that he owes $130K in taxes to CA for 2022. He did not meet the reserve requirements on the loan after paying the taxes due with the assets he had provided. He fortunately had additional money in India that he was able to move over to his US accounts, so he’ll still qualify for the loan. (Phew!) This is an extreme example, but if you have any clients that you know were super tight on getting approved because of reserves, it may be a good idea for them to check in with their lender. If they currently own a home, they may also have a dip in savings from paying property taxes recently.
Jamie Myers | Home Loan Advisor
Golden 1 Credit Union
C (408) 313-8970
880 E. Campbell Ave, Suite 104
Campbell, CA 95008