As a Real Estate Agent, you work 24/7. Here is a quick marketing tip to help you not only enjoy the extended holiday weekend, but to also turn it into future business, closed deals, and more money with very little effort.
General
General Topics
Current lending rules too tight
The percentage of mortgage applications rejected by the nation’s largest lenders increased last year, spotlighting how banks’ cautious lending practices are hampering the nascent housing market recovery.
In all, the nation’s 10 largest mortgage lenders denied 26.8% of loan applications in 2010, an increase from 23.5% in 2009, according to an analysis by The Wall Street Journal of mortgage data filed with banking regulators.
Although lenders were expected to pull back from the freewheeling conditions that helped inflate the housing bubble, some economists argue they are now too conservative, and say that with the U.S. economy still wobbly, mortgages need to be easier to obtain for qualified borrowers, not harder.
Real Estate news for 6/30/2011
Former Citi executive charged with $19 mn fraud in… Biggest Tax Avoiders Win Most Gaming $1 Trillion U… China has 7.14 lakh 3G towers for 73.76 million su… BMY Stock | Bristol-Myers Squibb Stock To Go Ex-di. …
http://joanagramunt.blogspot.com/ — Thu, 30 Jun 2011 04:42:00 -0700
Mortgage Fraud Blog is the premier website for news and information on mortgage fraud and real estate fraud throughout the United States. Rachel Dollar Picture Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage …. NASDAQ Reports of mortgage fraud in the U.S. rose 31% in the first three months of this year as banks scoured their files for shady loans made during the housing boom, according to a government report… 4 from Minn., Wis. …
http://www.mortgagefraudblog.com/ — Thu, 30 Jun 2011 02:21:52 -0700
Homes Market Value – In the real world, very few individuals order appraisal reports to establish an offering price or to substantiate a purchase price. At the point that an offer to purchase (in a typical residential transaction) is made, … However, whether you are buying or selling, a real estate agent has access to the latest sales data and can give you a more accurate value for your home.How can I find out my homes value? – You can check with a local Realtor. …
http://nationalrealtynews.com/ — Thu, 30 Jun 2011 00:31:05 -0700
Real Estate News for 6/28/2011
People who have homes that are going into foreclosure have enough things to consider. Once they are forced to vacate their properties they then need to address any tax issues they may be facing. To determine any tax issues, … Recourse mortgages allow the lender to pursue any deficiency balance against the borrower. Many states have enacted laws (anti-deficiency statutes) that can protect certain borrowers. Mortgages are nonrecourse if the real property is the only …
http://realestatearticle.org/ — Tue, 28 Jun 2011 03:59:15 -0700
Mortgage Fraud Blog is the premier website for news and information on mortgage fraud and real estate fraud throughout the United States. Rachel Dollar Picture Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified … James and Wendy Ober, Hudson, Wisconsin, Raul Burgos Pliego, Farmington, Minnesota, and Alejandro (Alex) Sanchez aka Silverio Alejandro Sanchez Cruz, Bloomington, Minnesota, were charged with racketeering in a scheme that lasted from …
http://www.mortgagefraudblog.com/ — Tue, 28 Jun 2011 02:38:22 -0700
Enumerated are the 5 most popular reasons why mortgage applications get denied. A few of them even at the last stage if you end up all prepared to relocate into your new house. Avoid these five errors and you will have higher chances of getting your … One of the first things the lender will do when you submit your loan request is to verify your credit scores. You credit standing is well accessible to lenders on request when you have submitted an application to them. …
http://freeadspost.org/ — Tue, 28 Jun 2011 02:32:43 -0700
News for 6/18/2011
Low Monthly Payments: Put in perspective, a $200000 property with a 30-year-fixed mortgage at a 5% interest rate (with a 20% down payment) could translate to a relatively low monthly mortgage payment of less than $860. Using the same parameters … MINNESOTA, Red Wing, $348493.00, Owatonna, $146652.00. MISSISSIPPI, Diamondhead, $248110.00, Jackson, $117330.00. MISSOURI, University City, $417725.00, Kirksville, $125010.00. MONTANA, Bozeman, $486538.00, Billings, $180161.00 …
http://www.trulia.com/blog/pauldisegna/ — Sat, 18 Jun 2011 07:35:31 -0700
Raleigh home loan rates are at very low levels…Yes, Raleigh mortgage rates are very attractive and it may be the last time to re-fi your current home. Again, Raleigh home loan rates are attractive and there is money to lend however not …
http://lifesagamble.org/ — Sat, 18 Jun 2011 07:29:46 -0700
Source: “Population Growth to Drive More Compact Housing,” Inman News (June 16, 2011); Blog distribution provided by Kenneth Bargers and Bargers Solutions, a proud member of Pilkerton Realtors, residential real estate services located …
http://kennethbargers.com/ — Sat, 18 Jun 2011 06:18:02 -0700
Tips, Information, News and Counsel about the Housing Market; National, Regional and Your Neighborhood … KELLER WILLIAMS CLASSIC REALTY NORTHWEST. http://www.tomslupske.com. 7365 Kirkwood Court #200. Maple Grove, MN 55369 … Currently, interest rates sit at historic lows. However, Fannie Mae, Freddie Mac, PMI and the National Association of Realtors are all projecting approximately a 1% increase in mortgage rates over the next year. A one percent increase in rate …
http://tslupske.featuredblog.com/ — Sat, 18 Jun 2011 05:25:10 -0700
Top 10 least, most expensive real estate markets California dominates among costliest marketsBy Inman News, Wednesday, June 15, 2011. Six out of the 10 most expensive housing markets in the U.S. are in California, according to an annual report from … MINNESOTA. Red Wing. $348493. Owatonna. $146652. MISSISSIPPI. Diamondhead. $248110. Jackson. $117330. MISSOURI. University City. $417725. Kirksville. $125010. MONTANA. Bozeman. $486538. Billings. $180161. NEBRASKA. Kearney …
http://www.trulia.com/blog/allanerps/ — Sat, 18 Jun 2011 05:53:13 -0700
Tips, Information, News and Counsel about the Housing Market; National, Regional and Your Neighborhood … KELLER WILLIAMS CLASSIC REALTY NORTHWEST. http://www.tomslupske.com. 7365 Kirkwood Court #200. Maple Grove, MN 55369 … However, Fannie Mae, Freddie Mac, PMI and the National Association of Realtors are all projecting approximately a 1% increase in mortgage rates over the next year. A one percent increase in rate negates a ten percent fall in prices. …
http://tslupske.featuredblog.com/ — Sat, 18 Jun 2011 05:25:10 -0700
NEW YORK – June 17, 2011 – A New York appellate court last week ruled that a Reston-based company that electronically tracks and transfers millions of mortgages did not have the right to foreclosure on a property or assign a mortgage it … “The law must not yield to expediency and the convenience of lending institutions,” Justice John M. Leventhal wrote in the New York appeals court ruling last week, adding, “Proper procedures must be followed to ensure the reliability …
http://www.trulia.com/blog/debbie_albert/ — Sat, 18 Jun 2011 04:40:59 -0700
All mortgage brokers are gone, so the housing industry is fixed? WRONG
The real estate industry is a mess… But who is to blame, and who is fixing it?
IN the panic and adolescent reaction to the sub prime mortgage meltdown, Congress led by two totally unknowledgeable politicians, Barney Frank and Chris Dodd, ran amok in Washington with a 2800 page bill to reform the world; we only hope more intelligent heads will begin to prevail and correct the mess those two have made. Part of that mess was a pathetic, thinly hidden attempt to get rid of mortgage brokers. Seems to have worked… Last I saw, mortgage brokers now only account for about 6% of the mortgage loan business, where in 2006 – it was something like 60%.
Has it works? Watch another great video by Frank and Brian of TBWS
QRM: Three letters that will wreck the housing market
QRM. Three letters that will wreck the housing and economic recovery of this nation. Find out what QRM (Qualified Residential Mortgage) means, and how it is going to effect you.
Shopping for a Mortgage Lender. Inside scoop on how to choose one
Shopping Around For A Mortgage Lender?
Here is THE INSIDE SCOOP on how to IDENTIFY A PROFESSIONAL MORTGAGE LENDER, BROKER, and LOAN OFFICER
HERE ARE FOUR SIMPLE QUESTIONS your Loan Officer absolutely MUST be able to answer CORRECTLY. IF THEY DO NOT KNOW THE ANSWERS – RUN, DON’T WALK RUN TO A LENDER THAT DOES!
1) What are mortgage interest rates based on? (The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.)
2) What is the next Economic Report or event that could cause interest rate movement? (A professional lender will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate.
3) When the Fed “changes rates”, what does this mean and what impact does this have on mortgage interest rates? (The answer may surprise you. When the Fed makes a move, they are changing a rate called the “Fed Funds Rate”. This is a very short-term rate that impacts credit cards, credit lines, auto loans and the like. Mortgage rates most often will actually move in the opposite direction as the Fed change, due to the dynamics within the financial markets. For more information and explanation, just give us a call)
4) What is happening in the market today and what do you see in the near future? (If a lender cannot explain how Mortgage Bonds and interest rates are moving at the present time, as well as what is coming up in the near future, you are talking with someone who is still reading last week’s newspaper, and probably not a professional with whom to entrust your home mortgage financing.)
One additional important aspect, is also understanding that not all Loan Officers are licensed. Be sure to only work with a licensed professional. You can verify a Loan Officer has a license by going to www.NMLSconsumerAccess.org
Be Smart… Ask Questions, and Get Answers!
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(C) 2011 – Joe Metzler – Cambria Mortgage, St Paul, MN #274132.
Modified Mortgages Ineligible for Refinancing
Previously Modified Mortgages Under Attack and maybe Ineligible for Refinancing
St Paul, MN: For many reasons, a lot of home owners have attempted and succeeded in getting their current home mortgage loan modified. Modifications come in many forms, including reduced interest rates, both short and long-term, principal forgiveness, etc.
Modifications, and short-sales, terms never heard of just four years ago, are now commonplace. Lenders have struggled on how to deal with this phenomena in terms of underwriting guidelines for future credit. Short-sales for example, are generally treated by lenders as a foreclosure. While there are some exceptions, those doing short-sales generally have no benefit credit-wise over a true foreclosure.
Now lenders are starting to deal with modified mortgages, and the determination isn’t good for the consumer. While it is still the beginning of a new credit requirement, lenders are starting to refuse to refinance any customer who currently has a modified loan. Research with lenders shows significantly more restrictive guidelines for refinancing mortgages that were previously modified for the purposes of assisting the borrower (defined as “restructured loans” by Fannie Mae and other investors).
Simply put, if you have a “modified” mortgage loan, expect that you may not be eligible to get refinanced in the future!
(Definition: A restructured loan is one in which the terms of the original transaction have been changed, resulting in absolute forgiveness of debt or a restructure of debt through either a modification of the original loan or origination of a new loan that results in one or all of the below:
- Forgiveness of a portion of principal and/or interest on either the first or the second mortgage.
Application of a principal curtailment by or on behalf of the investor to simulate principal forgiveness. - Conversion of any portion of the original mortgage debt to a “soft” subordinate mortgage.
- Conversion of any portion of the original mortgage debt from secured to unsecured.
Refinancing? Common mistakes to avoid
Mortgage Interest Rates are near historic lows. You want to refinance?
Common mistakes, and what NOT To Do
There are a lot of things “not to do”. I will point out only the 3 most common mistakes I see people make.
- Setting an unrealistic goal. I always get inquiries from people who say something like, “I have a 30 year fixed rate loan at 5.875% and I will refinance ONLY when rates get to 4.0% with no closing costs”. Sometimes I call people back and say, “Why 4%? why not 3% or 2%? They say, “Well rates are not going to go that low”. Right and they are unlikely to go to 4% with no closing costs also (“no closing cost” loans typically cost anywhere from 1/2% to .75% higher than the going interest rate) You should first succumb to the fact that once you can lower your rate with no out of pocket expense, you should probably refinance. Don’t draw unrealistic interest rate lines in the sand. They get blown away too easily.
- The “Once rates start dropping, they are going to continue to drop and I’m smart and I am going to lock when rates hit the bottom of the market” syndrome. It is very hard to guess the interest-rate cycle, and pretty hard to catch the bottom. Remember that rates can rise fairly quickly.
- “If the rate goes down just another 1/8th percent, then I’ll lock” This one just kills me! I see people lose all the time over this theory. If your current rate is 5.875% and today’s rate is 4.875%. LOCK & CLOSE! Most people have what I call “interest rate block”. They get a rate stuck in their head, and that is the rate they want, no matter what. Most people fail to realize (and most loan officers fail to show them), that the difference on the average loan over 1/8th a percent is usually less than $15 per month. If you can save $150 per month on your loan at today’s rate, why gamble? Why hold out for another $15 when the odds are against you?
Don’t get piggy. Work with us. Set a goal and lock when it gets there. Are we going to hit the bottom? Probably not. Are we going to save you money? Yes. If you can save money with no out of pocket costs, than you have nothing to lose. If you want to gamble go to Las Vegas. It’s a heck of a lot more fun. Apply Now
Extra Tricks to Save Money When Refinancing
The purpose of most refinance loans is simply to save money. The goal is to minimize your expense over the life of the loan or to minimize your monthly payment in the near future.
If you can swing it, don’t roll every cost of refinancing into your new loan. Most people escrow for taxes and insurance. If you do, your current lender must give you escrow refund within 30 days of paying off their loan. Your new lender, be it us or someone else, must take the equivalent amount of money (or more) at closing to start the new escrow account.
Remember that you always get to skip a month of payments. If you close June 5th, your first new payment is August 1st.
Knowing this, paying some of your closing costs out-of-pocket will save you even more money in the long run. Why roll in $4000 in closing costs, when you really only need to roll in $2000 ($1000 escrow refund + $1000 missed payment = $2000). Paying that $2000 over 30 years doesn’t make sense if you don’t have too.
On the other hand, some people love the fact that they didn’t pay anything out of pocket to refinance, got a nice escrow refund check, then got to miss a mortgage payment. They use the ‘extra’ money to pay bills, go on vacation, etc. 
Picking a Lender & Closing Costs
Shopping for a home loan is confusing. No matter what we’re looking for — from cars to refrigerators’ — there’s a built-in element of confusion. Why? Lack of knowledge. An unfortunate rule of thumb is that the less we know about something we need to buy, the more we can expect to pay for it.
Shopping for a mortgage in Minneapolis, St Paul, Duluth, Rochester, Madison, Milwaukee, and throughout all of Minnesota and Wisconsin is complex at best — even for the savvy previous home owner. Daily rate changes, time-sensitive lock-in periods, points, lender’s fees… plus the emotional element of probably the largest financial deal any of us will ever make. Throw in to this already murky stew the ingredients of tricky internet mortgage rate advertising, commissions for every officer, agent and broker who ‘helps’ in your transaction, and the obscure differences between ‘rates’ and ‘fees.’ It’s no mystery that many buyers settle for a home loan that exceeds their monetary means out of sheer exasperation!
Please review our information on closing costs and “BAD Good Faith Estimates“. There is currently a large number of fly-by-night lenders doing some incredibly misleading rate & closing cost advertising. Remember, if it sounds too good, it probably is! Also check out my article “Best Rate or Lowest Cost” for more loan comparison information.
The Bottom Line
Remember, the first rule is that there are no rules. You should refinance if it makes sense for you. Every person & situation is different. What makes sense for one family, may not make sense for you. Call me today to discuss your wants, needs, and goals. Together we’ll determine if refinancing makes sense for YOU.
Click here for more information on the actual loan process.
Click here for 10 Tips to a Smooth Closing
Click here for 10 Mistakes to Avoid
IRS Reports First Time Home Buyer Tax Credit Abuse
The IRS says there was significant abuse and fraudulent claims related to the $8000 First Time Home Buyers tax credit. Pretty shocking numbers… $29 Billion dollars given to 4 million people, and the fraud amounted to…
What are your thoughts? Log in an post!
Tough Real Estate Market? What are buyers and sellers supposed to do?
The real estate market today is one of the toughest in recent history. A large number of foreclosed homes on the market is marking it tough on the traditional home seller. While every market is different, most areas have seen a significant drop in value.
The mortgage industry has tighten lending, with a virtual elimination of all non-traditional financing and “creative” zero down type options (although VA and USDA are still around and great zero down options). Most programs today require 3.5% to 5% down MINIMUM and good credit. Gone are the days of easy lending.
Washington has tried “fixing” mortgage lending, but has essentially failed with bad programs like FHA Secure, Help For Home Owners, HARP, and HAMP. They’ve made industry changes that have cost home buyers more money, like HVCC, and LO Compensation. They’ve created more confusion with the new three page Good Faith Estimate, and the whopper of them all… Only requiring half of the Loan Officers to have a license!
Traditional sellers have the upper hand and an easier time in most cases in the “condition of the property” category versus a foreclosure, but it is still very tough when the banks are liquidating foreclosed properties, and the prices they are giving some of them away at.
So, what is a seller and buyer to do? How does a seller sell and a buyer buy in today’s market?
First, understand that because of the large volume of foreclosed properties, it is a great time to be a buyer, whether you are a move-up buyer or a first-time buyer.
For sellers, now is not the time to try and sell your own property. You need the help of a FULL-TIME, experienced Realtor to help guide you through the process. Buyers need the same help to guide them through the maze of properties, both traditional and bank-owned. Having a good agent is extremely important. Take some time to interview your Realtor. How long have they been in business? How many sales have they completed? How many buyers have they helped? Can you get references? Don’t just pick your agent from an open house, or use your sisters best friend who got her license last month.
For move-up buyers, you may have to give in to a lower than you like selling price, but you should reap a nice reward on any new home you buy. This is especially true if you are moving from the low $200k to the mid $300k range, as homes that were selling in the $400k range are now in the $350k. Therefore, even if you have to give up a little on your current sale price, you should more than make up for it on the buy side. Remember, a house priced right, and realistic, will sell even in today’s market right away. Furthermore, with today’s standard fixed rates hovering around 5%, you can still lock in historically great rates!
For first-time buyers, it is a great time to find aggressively priced homes, whether it is a bank-owned foreclosure, or a motivated traditional seller. Not all buyers are ready, or want to tackle “AS IS” foreclosures, so be sure to be honest with yourself about what you are doing to avoid a potential disaster down the road.
Today’s prices are again extremely affordable in the first-time buyer starter home category. Even though most zero down programs are no longer available, with proper negotiation, you can get the seller to pay most, if not all of your closing costs.
This means you can buy a $150k home for just $5250 out-of-pocket. With programs like FHA, the entire down payment can be a gift from family members, or community assistance programs. That is how it was always done prior to about 1999… and somehow people bought houses then, so don’t sit back waiting. NOW is the time to buy!
Finally, one of the first things you should do is get pre-approved with a quality lender who will discuss with you your qualifying ability and program options in today’s market. Someone who has the knowledge, expertise, and full range of programs (like FHA) to bring you to a successful no surprises closing. This is never the guy on the internet posting the lowest rate, or the unlicensed bank representative at the 1-800 number bank call center.
A word of caution. If you are shopping for a lender based on rate, be prepared to get screwed. Be sure to read these informative articles for more information: “Rate Shopping – How to do it right“, and “Lender Shopping – How to do it right“.
No matter what your real estate needs are, buying or selling, with the proper guidance of full-time professional Realtor and Loan Officer, you should be able to have your dreams come true.
WOW your sellers with simple internet marketing
WOW your sellers with Internet Marketing.
As an agent, you can sell homes. The number 1 issue most Realtors face is
finding the next client. So now you’ve gotten a listing, but are your
clients saying WOW and referring you to others? Today, it is simple to WOW a
seller with free, or close to free internet marketing of their home. Learn
how with this short video from
Joe Metzler of Cambria Mortgage, St Paul, MN
The credit bureau is selling your info. Here is how to stop it
Getting a mortgage loan? Beware of the credit bureau.
You’ve shopped a few lenders, gotten some quotes. You’ve narrowed your search, supplied a full application, and supporting documents. The lender has now pulled your credit report, and informed you everything looks great. You lock your interest rate, and move forward.
Suddenly, you are overwhelmed with telephone calls and an overflowing mail box with offers from competing mortgage companies. What is going on?
Sadly, there is a new and horrible marketing trend called “trigger lists”. Because the lender and pulled your credit (they had to), they triggered an unintended event.
The credit bureaus have found another way to increase their revenue at your expense, and WITHOUT YOUR PERMISSION.
Having credit checked is an important and necessary step in the home buying process, as well as something that is done for many other legitimate reasons. Very few people realize that each time your credit is
checked, an “inquiry” is generated on your personal credit report.
The credit bureau’s are now selling your “inquiry data”, including name, address, phone number (even unlisted), credit score, current debt, debt history, property information, age, gender, and estimated income. They are selling all this personal and confidential information to anyone who writes them a check!
These low life mortgage lenders purchase these leads at a premium price. They then will do, and say anything they can to recoup their investment and turn a hefty profit. Bait and switch tactics are being used to lure clients away from their reputable lender. Many of our clients have even been called by these disreputable lenders and told that the lender they had been speaking to previously “passed on” the information to them!
The good news is you can make it stop immediately. The consumer credit reporting industry has provided a way to “opt out” and remove your name from these lists. You can contact them by phone at
1-888-567-8688 or online at www.optoutprescreen.com.
You certainly have the right to shop for the best professional to meet your lending needs. This should be done on your terms, when and how YOU chose. Unfortunately at this time, these unsolicited marketing tactics are a nuisance and intrusive, but perfectly legal.
Our company, Cambria Mortgage, and my team are doing everything in our power to limit these credit report abuses. We suggest you call your representatives to let them know how you feel too.
Take the time to protect yourself from identity theft and unwanted solicitations. OPT-OUT NOW!
Are No Doc loans still available?
“NO DOC” loans had been around for years, and served a niche market for the self-employed, commission, and tipped income home owners. Because of their additional risk, they came with higher interest rates, bigger down payments, and generally were only available to self-employed people with a minimum of 2-years provable self-employment history and trouble documenting their true income.
As the home loan markets changed through the early 2000’s, these loans grew in popularity, especially once Wall Street introduced new no doc, stated income, stated assets, no job, and other ridiculous variations with underwriting guidelines so silly almost anyone could qualify for a home loan.
These new variations turned a small niche program into what became commonly known as liar loans. This was because because both customers and Loan Officers were easily allowed to misrepresent the borrowers true circumstances. They were highly abused by consumers, and bad loan officers everywhere, as people realized they could easily get a loan they either should not be getting at all, or more commonly, to get a bigger loan than they normally would have received.
These liar loans were one of the first casualties of the mortgage market meltdown as many of these customers were some of the very first people to end up in foreclosure. Lenders everywhere quickly pulled them from their product lines, and many states now have laws on the books banning them completely.
Unfortunately, the self-employed, commissions, and tipped income people who truly need and benefited from stated income, no documentation (NINA, NIVA, NISA, SISA) type loans are now without loan options. The old saying, one bad apple spoils the whole bunch… In this case, it was a whole bunch of bad apples that spoiled it for the one who really needs it.
If you are looking for a respectable No Documentation loan, you are pretty much out of luck, unless you are:
- In a state that still allows them
- Have excellent credit
- Are in need of under 65% loan-to-value
- Are willing to pay huge up-front costs and very high interest rates to “hard money lenders“
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Looking for a “no doc” loan in MN and WI?, Can you still get financing? Maybe, but not without fully documenting your ability to repay your loan.
But, don’t give up just yet. Let a licensed professional loan officer review a full application.
MORTGAGES for SELF-EMPLOYED, and COMMISSIONED INCOME Clients
MORTGAGES FOR THE SELF-EMPLOYED, COMMISSIONED, or TIPPED INCOME Clients
Self employed individuals often ask … “Why is it so difficult to qualify for mortgage financing?”
Minneapolis, MN: Self-employed borrowers, those who work on commission, or those who receive tipped income present one of the most challenging areas of mortgage underwriting. Qualifying self-employed people often requires significant extra time, energy, and patience. A fair and honest pre-qualification requires a special set of Loan Officer skills and expertise.
Long gone are the days when any Loan Officer could give a low doc, no doc, or stated income loan to a self-employed borrower, commission, or tipped income client without any training or special consideration.
Generally speaking, it’s tougher for the self-employed buyer to qualify for a mortgage because it is hard to answer the question: “What is your income?”
What did you earn, what did you write off? Taking advantage of tax laws to reduce income is great for reducing tax liability, but also shows you make less money, making a potential home mortgage loan approval difficult.
Next lenders are looking to see a income history. Is income increasing, decreasing, or stable? This all comes into play for self-employed, commissions, and tipped income home buyers and those same type clients interested in a refinance of their existing home loan.
Today, lenders are back to the old way of providing mortgage loans, and the vast majority of Mortgage Companies, and especially Mortgage Loan Officers are either afraid to work on a self-employed persons home loan, or simply lack the extra knowledge and skill required to get self-employed people a home loan.
Reading, understanding, and qualifying a buyer off of tax returns is not for the weak of heart, or unlicensed bank reps working at a call center.
Self-Employed and Commissioned DOCUMENTS REQUIRED:
Be prepared to send us the following documents. We will be unable to assist you or evaluate you mortgage loan qualifications without them:
- Last two years personal tax returns (all pages, All schedules)
- Last two years business returns if employed through a corporation (all pages, all schedules)
- Current Year-to-Date P&L (Profit and Loss Statement) and Balance Sheet
We will also require the traditional standard home loan approval documents:
OTHER INCOME
- Copy of most recent two (2) years W-2 statements (for you and any co-borrowers)
- Copy of pay stubs covering the last (30) thirty days (for you and any co-borrowers)
ASSETS
- Copy of most recent monthly bank statements (ALL PAGES. If it says “page 1 of 3”, I need all 3 pages no matter what is on them.
- Copy of most recent statements on 401K, IRA, or Mutual Fund Accounts
- Copy of most recent brokerage statement for any stocks, bonds or certificates of deposits (or copies of actual certificate)
LESS THAN 2-YEARS SELF-EMPLOYED? YES, it is possible… But it is an exception and NOT easy to get approved. You will need to have worked in the exact same field, with a similar income, and have at least 1-yr of self employed Federal Tax Returns