Housing Comp’s vs. Lender Comp’s

To Realtors, a Comp (“Comparable Sold Property”) is a nearby, recently sold home similar in size, style, and condition to the “subject home” (the loanhome being valued).

What’s a “Comp” to a lender?

The borrower’s annual income for any given year.

Excluding a Harmful Comp

Just like the key to a home appraising can be excluding a “bad” Comp (an isolated foreclosure nearby; a home that was dumped cheap by an estate seller, etc.), the key to qualifying a borrower for a mortgage can be excluding a year with sub par earnings, especially if there’s a ready explanation.

According to Edina Mortgage’s Steve Mohabir, the odds of the lender going along further improve when the applicant’s long-term earnings trend is up, and the bad year is truly an exception.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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