How to Get a Mortgage When You Are Self-Employed

by Mary Shea Wilson on October 15, 2014

Getting a mortgage these days can be tough and it is even tougher for small-business owners. Potential self-employed borrowers usually have variability in their income streams. Today, banks are requiring more financial documentation from all buyers, and self-employed borrowers tend to face more scrutiny.

Small-business owners may have a smaller income because they are typically knowledgeable about tax deductions and credits. This often reduces the amount of taxable income they have. Reducing the amount of taxable income on your tax returns means to the lender there is less income to qualify for a loan.

There are ways self-employed borrowers can increase their chances of getting a home loan, however. Here are a few tips:

What is the lenders history?

Find out if the lender has a history of working with self-employed borrowers. Self-employed borrowers should focus more on finding a lender that will understand their situation rather than shop the loan rate. There are individual loan officers who will be able to think out of the box or come up with solutions. The lender you choose is key.

Consider portfolio lenders.

Portfolio lenders have more flexibility in originating loans because they don’t have to sell the loan to Freddie Mac or Fannie Mae. Portfolio lenders hold their own loans. That makes a big difference in their ability to loan. Another option may to consider credit unions. Many credit unions also keep a good portion of loans on their books.

Boost your income.

Show you make as much money as possible on your tax return. You might need to amend your tax returns. Some lenders will look at a loan application again if they have sent in amended returns to the government. Sometimes by rethinking deductions and credits on income taxes, a borrower can increase his qualifying income. Of course, with this strategy, the borrower would also face a new tax bill.

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Why You Can’t Sell Your Own Home

by Mary Shea Wilson on October 8, 2014

Did you know that home sellers that use a real estate professional on average get 16% more in the sale of their home? In rare instances, some people are able to sell their own homes without the services of a real estate agent but for most it is tricky business.

Here are a few reasons why you can’t sell your own home.

1. A home for sale needs to be in the MLS (multiple listing service). You need to be a licensed real estate broker or  agent to be able to put a home in the MLS. Not having your home in the MLS is problematic, it will be difficult to advertise your home on many home search engines and websites.

2. Many real estate agents won’t show homes that are for sale by owner. For a real estate agent it can be difficult to deal directly with a home seller. Agents are used to receiving a commission on the sale and without a written agreement there is no guarantee that the buyer’s agent will be compensated for his or her services. Not having the cooperation of local agents significantly limits the pool of potential buyers.

3. Many buyers do not want to deal directly with the seller. Potential buyers usually feel uncomfortable looking at a home if the owner is present.  They will also be less likely to make an offer if they have to negotiate directly with the seller. Real estate agents create a much needed buffer between the seller and the buyer.

4. A real estate transaction is not always easy. Many times there are potential liability issues. Sellers would need to be well schooled in the real estate laws especially surrounding escrow and disclosure requirements.

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Do I Need a Home Inspection?

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Must Do Repairs Before You Sell Your Home

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Setting an Asking Price for Your Home

08.27.2014

Setting a price for your home can be one of the most important decisions you make when placing your home on the market. The asking price can often make or break the sale. The asking price is part of the marketing of the home. Here are some tips on how to set the right asking […]

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