Mortgage Grapevine

Unreimbursed expenses

I have always deducted the expenses from income and today the uw gave borrower full credit for income and treated the expenses as debt. Which is the correct treatment of expenses?
by Snapper January 30, 2013 3:46 PM

they should be a reduction in income
by LOANMAN January 30, 2013 4:41 PM

should be a deduction.
by LincolnMortgageAE January 30, 2013 5:17 PM

Yours - but don't argue :)
by MichiganTed January 30, 2013 6:48 PM

Better close that quick.
by BigHappy January 30, 2013 9:22 PM

Your way is correct. If it affects your deal closing you should bring it up. But if not, I wouldn't ruffle feathers over it...

For example:

10000 Income

2500 Liabilities

500 Unreimbursed Expenses

30% Ratio, right?

The other (Correct) Way

9500 Income

2500 Liabilities

26.315 Ratios...
by TheKyle January 30, 2013 9:26 PM

Thanks guys I just needed a little reassurance. Ratios work either way.
by Snapper January 31, 2013 9:51 AM

I would copy and paste the guidelines and send it to the UW.

Problem with adding it to debt is that the borrower could argue that they no longer will incur this debt .... i.e. teacher that had to complete a course for their lic and they deducted this as 2106 expense - this teacher could argue with UW that this is not a debt and should not affect the DTI.
by RonnieMTG25 February 1, 2013 11:45 AM


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