Once again new mortgage products are hitting the market and serving a smaller more niche segment of American consumers. This is a great alternative product for the homebuyer and homeowner. Typically coming with 30, 25, 20, 15, 10 year fixed, adjustable rates and even some interest only options. Let’s take a look at the bank statement mortgage, the “Good Bad and the Ugly”. Let’s start with some negatives.
The Bank Statement Mortgage generally comes with a higher than average interest rate. It makes sense. The more risky a mortgage is, the more it costs. Using bank statements as income to qualify is by itself more risky. The lender is basically acknowledging you may not be able to qualify for a mortgage if you used your traditional income documentation, like tax returns, W-2’s, paystubs etc. Expect an interest rate at least 1.5% over the going conforming market rate and cost. You will almost certainly pay fees/points to get a manageable rate. But again, it is an Alternative when you’ve been turned down for a conventional conforming mortgage.
You don’t get to use ALL your deposits. Typically, you cannot use all your deposits. Lenders will typically disallow, returns, refunds, cash (unless typical for business) and transfers from other bank accounts you control. You will also most likely have an expense factor subtracted from your deposits… Oh yeah and your deposits need to usually be within your Profit & Loss Statements stated income. It’s not JUST your bank statements being used it the whole financial picture. A qualified licensed Loan Officer is critical for a smooth bank statement loan.
You may be able to use business or personal bank statements. This mortgage product sometimes allows wage earners to use personal bank statements and self-employed borrowers to use business bank statements. The percentage of deposits you can use, can be impacted by the number of owners of your company.
You can borrower up to 90% of your home’s value. Or put down as little as 10% if you are buying a home. This program has slowly expanded and there are programs that can allow you to borrower up to 90% of the value of you home. Purchase, Cash-Out or Rate and Term Refinances are available.
There isn’t usually any Mortgage Insurance required on these products. So no mortgage insurance payment every month if you borrower more than 80% of your value.
Don’t forget to check for a prepayment penalty. Some of these products carry with them a prepayment penalty, in the event you pay the loan off early. Make sure to read your loan documents carefully!
Certified Mortgage Banker, Licensed Real Estate Broker. NMLS 235435, 1059372
Owner – Broker – Operator – Originator
Even for loans already originated for funding after January 1st, 2018!
The Federal Housing Finance Agency (FHFA) has issued the maximum loan limits that will apply to conventional loans to be acquired by Fannie Mae in 2018. The first mortgage loan limits are defined in terms of general loan limits and high-cost area loan limits. The limits are increasing in 2018. First Mortgage Loan Limits The following chart contains the general loan limits for 2018: Units General Loan Limits Contiguous States, District of Columbia, and Puerto Rico Alaska, Guam, Hawaii, and U.S. Virgin Islands One $453,100 $679,650 Two $580,150 $870,225 Three $701,250 $1,051,875 Four $871,450 $1,307,175 The high-cost area loan limits are established for each county (or equivalent) and are published on Fannie Mae’s website and on FHFA’s website. The maximum limits for 2018 are: Units High-Cost Area Loan Limits Contiguous States, District of Columbia, and Puerto Rico* Alaska, Guam, Hawaii, and U.S. Virgin Islands One $679,650 $1,019,475 Two $870,225 $1,305,325 Three $1,051,875 $1,577,800 Four $1,307,175 $1,960,750 * A number of states and Puerto Rico do not have any high-cost areas in 2018. High-cost area loan limits are derived from median home prices estimated by the Federal Housing Administration (FHA) of the Department of Housing and Urban Development (HUD). FHA will permit a 30-day appeals period during which requests for individual area median home price increases will be evaluated. FHFA will issue a subsequent announcement if any individual high-cost area loan limit is increased as a result of the appeals process. Updates resulting from subsequent FHFA announcements will be posted on Fannie Mae’s website. Loans subject to the high-cost area limits are referred to as high-balance loans and must comply with the high-balance loan requirements described in the Selling Guide. © 2017 Fannie Mae. Trademarks of Fannie Mae. 11/28/2017 2 of 2 Second Mortgage Loan Limits The loan limit for second mortgage loans for 2018 is $226,550 (or $339,825 in Alaska, Guam, Hawaii, and the Virgin Islands). As stated in the Selling Guide, lenders must obtain approval from Fannie Mae to sell or service second mortgages. Fannie Mae is not currently acquiring second mortgages. Application of the Limits Based on Original Loan Amount All of the loan limits apply to the original loan amount of the mortgage loan, not to its balance at the time of purchase by Fannie Mae. Lenders are responsible for ensuring that the original loan amount of each mortgage loan does not exceed the applicable maximum loan limit for the specific area in which the property is located.
Effective Date The new limits are effective for whole loans delivered, and mortgage loans delivered into MBS with pool issue dates, on or after January 1, 2018. Whole loans delivered up through December 31, 2017, must comply with the 2017 limits. MBS pools with December 1, 2017 pool issue dates must comply with the 2017 limits, and MBS pools with January 1, 2018 pool issue dates must comply with the 2018 limits (even if delivered in December). Lenders must ensure the appropriate identification of highbalance loans at delivery using Special Feature Code 808. Desktop Underwriter® Implementation The 2018 loan limits will be applied to Desktop Underwriter (DU®) Version 10.0 and Version 10.1 loan casefiles submitted (or resubmitted) on or after the weekend of December 9, 2017. Also note that loan casefiles underwritten through DU prior to December 9 that receive an Ineligible recommendation due only to exceeding the 2017 loan limit may be delivered after January 1, 2018 (or in January 1, 2018 MBS pools). The loan casefile does not have to be resubmitted to DU if the loan amount complies with the applicable 2018 loan limit. Reference Materials To assist lenders in determining the applicable limits, we post reference material on the Fannie Mae website, including the Loan Limit GeoCoder™, which lenders can use to look up loan limits based on a specific address (or batch of addresses).
Non-Prime Lending today is fundamentally the same product I grew up with in the late 80’s and early 90’s and that was primarily offered by Finance Companies and Savings and Loans prior to that. These loans formally called Subprime, B&C Lending, Hard Money, and now mostly referred to as Non-Prime or Non-Dodd-Frank lending, Non-QM, Or even Alt-QM. The high fees usually associated with these products has been greatly reduced due to regulations, but there are still profits in the higher than market rates and still on average higher fees and costs than traditional FNMA or FHLMC Financing. “Back in the day” the typical double-digit start rate would also include 10%+ in points and over $2000 in junk fees and a very pricey prepayment penalty. Non-prime lending today more typically is priced from 1.5% to 4.00% higher than conforming mortgage rates and priced between 1-5% points with about the same in junk charges.
These loans are typically 30 years fixed or adjustable with 3-10 year fixed periods. Lenders sometimes offer Interest Only or 40 year amortization options. To determine a non-prime loans pricing, we need to determine the RISK. Below is a diagram of a lenders grid. You can easily see how the combination of Credit Score, Loan To Value, Mortgage History and Significant Credit Events and Transaction Type can affect your interest rate.
You can document your income with traditional pay-stubs, W-2’s or 1040’s or you can use Bank Statements. You can even use bank assets in a way that determines monthly income based on those those assets. Stated Income is an option once again, as is Stated Investor Income, where as residential investment property is qualified based on the Debt Service Coverage Ratio in an appraisal.
This loan was always primarily associated with equity lending. However prior to the great recession (depression for me) the product’s LTV’s started to elevate. With the introduction of Wall Street securitization, credit depth and makes sense lending went out the window. And so after Gramma on fixed income could buy a dream home with stated income on an 80/20 loan combo with a foreclosure the week prior. A true low in the lending industry. This time the product has re-emerged in its earlier more conservative form.
These loans can be used to do all of the following types of transactions. Purchase a home, Refinance a Home, Cash-Out your equity in a primary residence or an investment property. You can fix and flip a property. You can use these as home improvement loans. You can use these as swing loans as their are many times no prepayment penalties. You can use these loans to buy unique properties like non-warranted condos, or high rise condos. You can use these loans to borrower a down payment for another property. You can use these loans to close BK 13’s or cure a foreclosure. That’s a lot of uses and I am sure I’ve missed a couple.
It makes sense that the higher leverage or Loan To Value (LTV) you need, the higher the rate should be, and as you add risk, you can see that the available LTV does drop even as the rates rise. So a 700+ credit score with 0x30 and LTV of 50% is a much LESS risky loan than the 550+ 1×90, previous BK on a cash-out refinance.
The key to these loans is to have a direct conduit. Some companies layer on many fees and added expenses. These loan fees can be negotiated in some cases. Don’t be afraid to ask for exceptions to make a deal fit. This isn’t the conventional lock desk. And make sure to work with a competent seasoned licensed Loan Originator
It’s important to be honest with yourself when pricing these loans. You MUST have a complete application and understand all the pitfalls of your borrower and the property. It’s a big difference lending on a Single Family Residence rather than a Mobile Home. In fact, its a decline versus an approval in many cases.
Let’s take a look at pricing adjustments. Once you’ve determined your base rate and LTV. You need to check your adjustments. These are typically additional risk layers a lender is making adjustments for to maintain their own profitability on a loan. It makes sense, that if you want Interest Only that loan is inherently more risky as the balance of the loan doesn’t drop for years. And again, it makes sense that a property that is NOT your primary residence is a more risky loan and at greater risk for default if you have a life event. These adjustments typically are added to rate and sometimes rate and cost.
Non prime lending is filling needs for borrowers who have good cash flow but come tax time tend to show lower results due to deductions and a variety of reasons. Or for people who have had significant credit events. These financing options are great for people trying to get to the next level in their investments by risking a little more in interest rate to have easy to obtain financing. People trying to get out of BK and have equity in today’s environment. People trying to get current on their mortgages after years of modified mortgages and foreclosure fees. These are great options for those that finally were able to get rid of their homes but were ready to buy years ago, only to be stalled with that active zombie foreclosure.
Debt to Income Ratios are higher, right around 50%, Income Doc requirements are fluid and there are many different ways to document your income. Again the less income documentation you can provide the higher the rate and cost. Stated Income being the most expensive, but available.
Loan Amounts vary greatly. You can get small loans under $100,000 to well over $5 million with some lenders.
This financing is heavily dependent on the property as collateral. This is after all equity lending in reality. The underlying protection in all these loans is that if you or your client defaults, the lender will take the property. And it won’t be some zombie foreclosure. These lenders will act.
These loans are available in most states. Many state and federal limitations apply. These loans are risky and after the collapse in 2008, the market for this product has only recently begun to spike. Lenders are still gun shy from the risky lending days of the past. Although memories are very short.
And these loans are still risky. They should not be taken out without a good plan for repayment. These rates are higher and terms are more onerous than conventional conforming financing. You should ALWAYS make sure you don’t qualify for conforming financing before you consider these non-prime products.
This article was not an advertisement or an offer to lend.
I’ve come to a conclusion today.
The surest way to get your offer accepted, is to go to the listing agent and have them represent you too. Yes, I know that’s crazy. How can an agent be completely unbiased and neutral while still providing you the protection you need when he is representing the seller too? The short answer they can. And what protections are we talking about? Laws, Compliance, Disclosure. A Realtor most likely won’t try to pull the wool over your eyes anymore, as there are VERY punitive actions if they do. And if you read your disclosures and research your property you’ll be fine.
The market is totally digital now. Aside from actually walking through a property, everything is mostly online.
Realtors spend the VAST majority of time looking for listings. They typically don’t look for Buyers and furthermore don’t prefer to work with Buyers as the time spent with a Buyer is usually substantially higher than working with a Seller. And in a tight market, it is much better to have a listing rather than buyers if your the Realtor. Although they like to have both of course.
So think about it. There are multiple offers on each property. The listing agent has to look at them all and determine which are real, which are well qualified, which are cash and/or financing, which are too low, and which are too high with financing… and more importantly is the offer from HIS/HER Buyer is the mix. And remember the Listing agent in theory is not allowed to tell other prospective buyers what the other offers are at price and concessions wise.
All offers are required to be presented to the Seller. That is the truth. Are they? Who really knows. Let’s assume all offers are being presented to the seller. If you were the Listing Agent and you have to present all the offers including his/her own, whose offer do you think gets pushed and sold hardest? I mean we are talking almost double the commission in this scenario.
To add on to this further, if you are financing your property? You should try to use the Realtors Lender as well. The Listing Agent knows his/her Lender. They work together, they close deals together, and more importantly they KNOW and BELIEVE what their Loan Officer says about a Buyer. And TRUST that their Lender will make sure the loan closes. And ultimately, the Realtor wants to close the deal and get paid. Realtors and Lenders don’t get paid a hourly rate usually, they are paid 100% commission.
So if you LOVE a property and aren’t being represented by a Realtor already… I highly recommend you contact the listing agent, get pre-qualified by their Loan Officer and submit your offer as soon as possible. I think you’ll be happy you did.
In my opinion this theory only works for markets that are highly desirable and active with low inventory where multiple offers are the norm.
Michael Foote, CMB
Certified Mortgage Banker
Licensed Real Estate Broker #01149645, NMLS 235435 & 1059372
Sooooo… I was asked a few times to comment about what I thought a good company would look like and how I would want to be approached by a recruiter. It’s been said that no one is an easier ‘sell’ than a salesperson. I think that may be true.
1. Be honest. Seems obvious, but if you are a start-up, we all know it. Don’t tell us how amazing it is… We know you have bumps in the road. And that’s OK. I personally LOVE start-ups and the vibe they can create. If you are a industry vet type of company and everyone is leaving because you have a maniac running Ops we know that too. I have UWM AE’s call us all the time… They STILL talk about how great they are now, and how they sucked two ago. Dude you got in the business last week.. I see your profile, you were selling water two months ago.. And NOW you are a wholesale mortgage expert?… Change your title to Wholesale Telemarketer… and let’s be real. Everyone sucked then… compliance was a nightmare, business was brisk, and we were all over our ski’s with trying to keep up.
2. “We have great Marketing” – This doesn’t mean you rent a marketing portal and can generate flyers. IF you have great marketing, real marketing, you’ll be driving leads to your LO’s. And that’s a whole ‘nother thing and at a greatly reduced comp no doubt. You are either CashCall/LoanDepot, or you are self generated. Yes, its nice to be able to create click ad pieces but please if that’s a top 3 selling item for your company, you are in trouble.
3. Know who you are going after. Most people looking to leave NEED the job. Those that you are trying to recruit DON’T. If an LO is crushing it, or even doing moderate business in today’s market. He/She wouldn’t want to leave after some vanilla pitch. Would you? “hey yea, I know its going awesome, but come over here where its exactly the same and you can start all-over and MAYBE recreate the same thing you ALREADY have. Cause transferring a pipeline and all your branding is so fun.
4. Our comp is the highest…. OK you are telling me I can compete with Cash Call and have 250 bps comp… Well now I know you are full of crap…next.
5. We do everything. And we are awesome at it… No you are not, you added FHA last week, which means you just finished test cases and that means you have a FHA U/W that will crush hopes and dreams to keep compare rates in-line. Yes we look at your ratios. Tell me what you REALLY do well and we can talk, but if its 1% financing I am out… I’m in Orange County. And that buyer rarely gets the accepted offer. You see know your target and know your company. We all have bank statement programs now.. that isn’t even really that hot anymore.
6. Online reviews. We look at these. Check your indeed reviews if LO’s are leaving and commenting, we see it, we know why and it is an issue.
7. Culture. This is a big one that recruiters love to tout. And YES it matters. We all want to work with NICE companies who care about the well being of a company and its people. But isn’t that assumed?? And if it wasn’t you wouldn’t tell us, right? The problem for many of us is, we’ve worked in mortgage for years… LOL. So we know that culture can mean ANYTHING good or bad. Culture could mean a supportive proactive consumer approach to pipeline mgmt with lot’s of tech…. Or it could mean a delusional narcissistic CEO with a vision of world domination… Not a bad thing if you are into it… but I’ve had that one already.. no thanks.
In my opinion the Culture pitch should be replaced, We will help you fund more loans, we’ll help you find more of them, and close them smoother PERIOD.. and here is how. Now tell me how you are going to do that, and you have something.
Let’s be frank – we do a simple job and sell one product usually, Mortgages. Originate Loans – let’s not oversell ourselves as the second coming of the messiah.
If you apply with me for a refinance or purchase in the month of July. I will save your THOUSANDS!
For all July applicants, I will fund your loan for the cost of a Processing Fee ONLY…
The average loan has a margin of 1.5-2.5% of the loan amount. Not points, profit margin. I am doing each loan for a flat $2500…. That means if you need a loan for $625000 let’s say…the banker or broker will profit (gross) between $9375 and $15625.. My GROSS profit will be $2500… Flat… This offer beat anything you will find on the internet.
These savings are real… removing that much profit can save you even more of the course of the loan. If you paid off a 30 year mortgage and the banker/broker had a profit of $15625 as noted above, that profit would cost you over $26, 800+ over the life of the loan at an average interest rate.
This is the most ridiculous offer we’ve had… and I am proud to offer it to you and your family or friends. You must reference this blog post or article when applying.
You simply cannot beat this offer.
Michael A. Foote, CMB 30 years of mortgage experience.
We primarily work with Realtors and Borrowers. During transactions in a ‘hot market’ like right now it is not uncommon to experience an “appraisal cut”. It’s really not a cut but we industry peeps call it that when the appraisal value comes in lower than the sales price. Here’s why this happens and why an Appraisal Cut is actually an opportunity for the buyer.
The Appraisal Protects you and the Lender
An Appraisal Report is almost always required in a purchase transaction when financing is being used. This appraisal is required by a Lender. The purpose of the appraisal is to establish the Fair Market Value. To make sure a lender isn’t apart of a scheme or lending on an over inflated purchase price. They also want to verify what their equity position so they can determine Loan To Value and to make the loan salable on the open market. Among may other things these are the main items a lender is looking for.
Whew… But the appraisal also protects the buyer. Just because a Realtor and a Seller and a Buyer agree to a sales price it doesn’t necessarily mean that purchase price is the fair market value. What IF the buyer agent wasn’t all that good? Maybe he doesn’t realize the property is WAY over priced? Or worse, maybe he doesn’t care and just wants his commission. Rare, but unfortunately possible. The appraisal done by an IMPARTIAL certified appraiser make sure Buyers don’t fall prey to these mistakes, or intentional acts.
Is the Appraised Value Low or is the Sales Price Too High?
When a value comes in low, or notes required repairs, or has a “subject to value”. All parties should review the appraisal. And here is where your opportunity comes in. IF you have an Appraisal Contingency, you can back out of the transaction. Now most people don’t want to do this. If you like the house, its renegotiation time! Realtors hate it, but its a fact sometimes. You can ask the seller to reduce the price. They may not of course, especially if there are other qualified buyers in the wings; or you can also pay the difference in cash if you like the house. You can also renegotiate, maybe have the seller cover some closing costs, or make some repairs, or include some fixtures.
No one wants to drop out of escrow when an appraisal comes in. And if you are asked to make an offer without an appraisal contingency, be warned. You may still have to complete a purchase or be liable for damages if you don’t close even if the appraisal comes in short. If this happens in your transaction, work with your Realtor and take their advice. Sometimes, you have to pay more than an appraised value. But be open to compromise if you really want the property.
Sometimes it is what it is.
In hot market purchase appraisers have to use closed comparable sales. The listings may make it seem like values are higher. And in fact, people are probably paying more for homes already. But closed sale values lag hot market condition values.
But remember the appraisal is your friend and so are Appraisal Contingency’s
Michael A. Foote, CMB. Certified Mortgage Banker, Licensed Real Estate Broker 01149645 and runs a California Based Boutique Mortgage Brokerage and Contract Mortgage Processing Company. www.michaelfoote.com
I share real world stories with my clients always. They always help me and my clients make good informed decisions. I ran into a bad story that is good to share with all of you in regards to mortgage financing.
Too often we get stuck on getting the best deal, the easiest deal, or both. It’s a Californian’s drive to ‘grind’ people for better deals or better treatment. Sometimes it works, sometimes it doesn’t. Today’s example is of when it doesn’t.
-Paralysis by Analysis
A friend, who I’ve known for years, asks about a jumbo refinance in 2013… Yes, I said 2013. We spoke and talked about his current adjustable loan, which only interest was being paid on each month, and a recasting of this adjustable would take place in the next couple years. The new payment would be higher but the payment would be fixed and amortizing. He wasn’t willing to take the increased payment and his credit score needed to be a few points higher to obtain the slightly better pricing. The value needed to be a little higher maybe as well so we could include the HELOC that was maxed out and needing to be converted to fixed rate debt.
He moved on.
Over the next few years… rates changed very little, values shot up and in 2016, we talk about the mortgages again. Values are probably high enough to combine that pesky HELOC (which is basically a $100,000 credit card balance sitting out there…Albeit at a nice low compounding adjustable rate. The debt load was now lower so the DTI shouldn’t be an issue either. Comps are there.
We chatted, I quoted, He moved on.
Here is what the average rate and points for a conforming loan during this timeline:
2013 – 3.980% @ .70 points
2014 – 4.100% @ .60 points
2015 – 3.850% @ .50 points
2016 – 3.650% @ .50% points
2017 – 4.125% @ .50% points
What I didn’t fully until this point was that my friend, and I still consider him a friend, was speaking with other lenders behind the scenes and had applied at a few. One lender, a super techy-awesome mortgage bro-company advertised on the TV and Radio that has a Hip Cool Name, took his application and as a crappy mortgage company does, proceeded to drag the application and underwriting process out for weeks… No matter the companies techy nature, bad service is bad service, and worse further is working with people who don’t understand the real world of underwriting and rely on the computer to make all their decisions and push their workload…and the client gets turned down. All the while talking with me about, “what I thought about what the lender was telling them”. Yes, still my friend…Yes, those are painful conversations for us Mortgage Professionals. You mean you trust me enough to tell you if the other guy is hosing you… But not trust me enough to do the deal with? <Me swallowing my pride> OK, Thanks. My kids
As a reminder, I had already done all the homework, pointed out the concerns I had to the client, who went elsewhere, because someone said, ‘It’. The two most dangerous words commonly spoken by the mortgage sales people that give ALL OF US a bad name,
There are no two more dangerous words you can hear from a Mortgage Originator…If you are a consumer, Realtor and hear these words…don’t walk, run to another Originator. Because, those two words mean its gonna be a problem! You can count on it.
So after that techy-awesome So-Phisticated FIn-Tech Lender declined my friend we spoke about where he was now. We looked at his credit report, at this point, the constant credit pulls and changes he was told to make with his debts and cards, had pushed his scores from 719 to 680-ish… Almost a death blow for a Jumbo loan.
But I still had options and presented a plan of attack.
We worked on the credit, got the scores back up. And when we were ready to get started he applied at yet another lender. I graciously as possible accepted the call and notification that, yet again, he was going to work with someone else.
I don’t hard sell my closest friends or anyone for that matter. But I do regret not being more forceful and reminding him I’ve been doing this for almost 30 years, I’ve been right from Day 1, and oh yeah I’m your friend and trusted adviser? Maybe not? Still a friend though.
Sure enough the lender got the loan into underwriting… Which by the law is like suing someone, anyone can do it.. But getting an approval remains a difficult but precise process. Bad/Poorly Educated Salesmen = Low percentage of approvals.
My friends loan wallows in underwriting. Lot’s of “we are taking a look” or “I’m waiting to hear from the underwriter about the exception” or ” I’m gonna need another something”. All generally not good signs.
My friend was turned down again.
At this point we are in 2017 and the borrower home has peaked in value and it is probably the best time in the last four years for him to consolidate the first and second mortgages and get everything on a fixed rate, after all this is the house he wants to stay in with the wife and kids.
I quoted him again… at this point… I acknowledge that he will probably be applying somewhere else. I told him, I would have more input with underwriting, since I understand the file better than most, and I would do my best on pricing. After all after four years, it matter more to get it done than not, right?
He finds a quote that is cheaper than mine, again. Always amazing to me when there is always a LOWER quote. People… it doesn’t make it real. If you take anything away from this article, please realize you can be lied to by a mortgage sales person still. Shocking? It really shouldn’t be. People lie in all industries to win business.
I call him to check in one last time on the mortgage last week…
…And he still applied at yet another bank…
And he lost his job as well… Big paying tech job. I worry for him and his family. I am sure he will land somewhere and all will be fine.
He did say he would apply with me IF I COULD MATCH THE RATE & PRICE. I told him knowing he had lost his job is a non-starter for me as I would have to disclose it, which is pretty much a guaranteed decline at this point.
Still a friend though. I hope he lands a job, and I wish I could have made him trust me more.
Michael A. Foote -Certified Mortgage Banker & Trusted Mortgage Professional for 30 years.
Many will tell you to pay down your debt, dispute a late payment, payoff that collection account. And while all those may be great ways to improve your score. Here is one way you can get a huge jump in scores, maybe as much as 60+ points!
When a borrower has an account that is noted as a authorized user the account and its details, including balances are included in the RISK assessment. Really its all about the FICO or Credit Score algorithm used to determine your score.
So it makes sense that if you can remove yourself as the authorized user from an account your balances and obligations are lower and most likely contributing to a false representation of your liabilities. Even if you are the authorized user of you spouses account. There still will be benefit according to the credit scoring models today.
Your local mortgage broker can help you with this solution.
Michael Foote is a licensed Loan Originator and California Real Estate Broker. Experienced 30 years of mortgage finance, a Certified Mortgage Banker from the MBAA and Billion Dollar Lifetime Producer.