Why couldn’t they have gone to the lender and laid it all out, with full documentation?
The underwriter sees employment income at a job 200 miles from new house that the buyers is calling their personal residence. Underwriter thinks buyer is trying to buy investment property and get owner-occupied rate.
Why would the full-doc lender not reach the same positive conclusion the borrowers did?
One the buyer says they are leaving their current job, lender assumes income goes to zero. How does one document income from a new job using two pay stubs. It’s a Square peg, round hole problem.
And why isn’t it the lender’s prerogative to make that judgment, whether positive or negative? You are right. It’s their money (sometimes). They make the rules. In this case they made the judgement of having stated income (but not completely no-doc because assets were documented) in exchange for a slightly higher interest rate.
Just trying to point out that stated income, low doc loans are useful for a lot of situations outside of flippers, liars and tax cheats.
