Helping Frustrated Renters Become HAPPY Homeowners
May 10, 2018
                            No. 218

A Comfortable Place

An early season weekend getaway with “the boys” (a group of male friends) to a Gulf Island provides a lot to reflect on, as does the “hippy” island vibe.

So, we were off Saturday morning to explore the Island. Stopping at a gorgeous little cove, we immediately met two people. One was a master craftsman. He explained that he’d built the boat that he lived on, one of those anchored in the cove. His craftsmanship is apparently well known and the boat quite famous.

He pointed to the clearing through the trees. Junk was all around. “The lane of broken dreams,” he said. “Used to be quite a few people living along it, but it’s been cleaned up lately.”

Indeed, there seemed to be only one trailer there, belonging to the other individual who’d already emerged from the abode to engage us. A scruffy-looking fellow, inebriated, but pleasant, he was very chatty, telling us of his life and quizzing us about ours.

The old guy (I believe he was 75) had come over as a hippy back in a day, stayed, and became a clam digger. He’d raised several daughters, one of whom was, apparently, now very wealthy. She wanted to help her dad out of his situation. But he had no interest. This is his home; his life is, evidently, comfortable there.

As we left, we remarked that he was much better off here than on the Downtown Eastside.
But, I couldn’t stop thinking about the “lane of broken dreams.” I don’t know who all had been there previously, the broken dreams they may have represented, their other connections in life, or anything else about them. Were they otherwise homeless? Had they been here long or just temporarily? Would they have fit in with the one remaining member of that “community?”It struck me, though,  that there tend to be places where nearly every type of individual can fit in, whether they’re the “Housewives of Orange County,” Joe Middle-class in the suburbs, a student in an apartment, or even those who have lost their place in mainstream society. We’re told that even among the homeless—the ones who ostensibly haven’t found any such place—some prefer their status because it’s where they are most comfortable; it feels like “home.”
Many aspire to a place they probably can never attain…

Others would not aspire to leave their “comfortable place,” despite what those outside of their status might think of it. 

I wonder who’s the happier for it: those who will never achieve their aspirations? Or those who have become comfortable in a place they have found to be their own?

Rent 2 Own – What it takes, part 3
In the first two parts of this series we discussed the amount of income you need to qualify for a property with a 90% mortgage and how high a credit score you require to get a mortgage.
The third big factor is income stability. Lenders require that you show a consistent and stable income.

They love people who work in union jobs (because of their security) and government workers (same reason). Anyone else who works for a regular salary or hourly wage for a stable employer is also a good risk to the bank. However, they will require that your job is permanent (must be past any probation period) and income consistent. Therefore, they will require you to show pay stubs and T-4s from the previous year or two, as well as get a “Job letter” from your employer.

The ones that lenders have trouble with are people who are unemployed (can’t expect them to be able to support a mortgage), students (who’s only income may be temporary), people on commissions and the self-employed. The problem with self-employed and commissioned people is that their incomes are inconsistent. Therefore, they will have to show at least two years of income tax forms, showing a high enough personal income, usually taking the two-year average. However, if income is declining, they may take only the last year’s income into account.

Problems are compounded for the self-employed if they declare too many deductions and hence, only a low personal income. 
What may be good for income tax purposes is bad for mortgage qualifying. It is the personal income after all business deductions, not their gross business income, that will determine their qualifying level. Sometimes, self-employed people need to do a rent 2 own for several years simply so that they can declare a higher income for those years, forgoing some of the deductions they might otherwise be eligible for, so that they can show the lender adequate income over that two-year period.
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