on the 1003 right below dob is the independents section . why is the bank interested in this information?
2007-01-23 07:11:00 · 5 answers · asked by shandeclader 1 in Business & Finance ➔ Renting & Real Estate
You are talking about the Dependants section of the Loan Application. It asks how many dependants you have and their ages.
Some loan programs may require documentation as to child care expenses, if there are small children. Typically that is not a concern if there are two applicants and only one works. It will be more of an issue if both borrowers are showing full time employment, but then can be explained if the couple works different shifts or if a family member (grandmother, for example) cares for the child. A letter of explanation may be requested as documentation.
A VA mortgage used to require a different amount of "residual income" for a larger family than a smaller one. I am not sure if that requirement still exists as I have been out of the mortgage business for a few years now.
2007-01-23 07:30:34 · answer #1 · answered by Craig 1 · 1⤊ 0⤋
The reason for the number of dependants on the 1003 is for the debt to income ratio. For example is someone has dependants and they pay child support, that payment is equated in the calculations which shows the persons ability to pay the loan. Other than that it, it has no significance.
2007-01-23 08:56:42 · answer #2 · answered by Tarik B 1 · 0⤊ 0⤋
While I don't know the official reason we ask this question on the application, I do know one use. In underwriting, we always make sure the home is suitable for the number of intended occupants. If I see a family of five purchasing a 1 bedroom condo as a primary residence, I start asking questions. Usually it is really being purchased as an investment property.
2007-01-23 07:20:46 · answer #3 · answered by CJKatl 4 · 1⤊ 0⤋
I've never, ever heard of any underwriter looking to make sure a home is "suitable".
The ONLY legit reason, to my knowledge, is the same reason they ask for your years of education, race, sex.
It's for government monitoring purposes. Banks cannot discriminate based on many things, race, sex, marital status, etc... Banks and mortgage companies have to submit annual reports on who they lent to.
It can, however, play a small part in certain loan products that look at how much money you really have left over to feed your family after your debts are paid. So how many people in the household can be a factor.
2007-01-23 07:45:17 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Because dependents are expensive and may take away from your ability to repay the loan.
2007-01-23 07:19:27 · answer #5 · answered by J O 3 · 0⤊ 0⤋