Payment shock calculations?

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This topic contains 2 replies, has 2 voices, and was last updated by  firmeh89 6 days, 15 hours ago.

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  • #62056

    firmeh89
    Member

    Does anyone know how payment shock is calculated? It seems like putting the amount your payment shock supposed to be in a savings account every month is not good enough for payment shock calculations. The way I did it was on every biweekly check I did a direct deposit of half my payment shock amount Into a separate savings account and my next biweekly check I would put in the rest.

    #62059

    Nelsont
    Member

    31% gross income – current rent = payment shock

    Here is what trips people up: they don’t want to see that you literally put your payment shock into a savings account. They want to see that the sum total of all your bank accounts increases by your payment shock amount. So let’s say you have $500 in one account and you have a $300 payment shock you put into another count. That $800 total. That means the next month those 2 accounts must equal no less than $1100. Which also means if you have $600 in your payment shock savings account after 2 months and $400 in your other account then the clock starts over because that counts as not saving. In that example your one account must never get below $500 under any circumstance. Make sense?

    Also you can manage your money any way you see fit but, the less accounts you have the easier it is for your MC and the underwriters to review. Using 1 bank account your statement balance must simply be $300 more than the month before using the example above.

    #62060

    firmeh89
    Member

    I think I understand, thank you!

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