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Self Employed Mortgage Loans - A Survival Guide
When you're self employed you have numerous advantages. As you are a free agent, you will write off every deduction you can on your tax return. You acquire the potential to earn extra income much more so than someone who is employed by someone else. The best part is that you are the gaffer, the boss! On rare occasions, being freelance has some drawbacks. One is when you go to get finance for a property or a large purchase. However, here are some items to know that could help you prepare for the mortgage loan process. A self-employed mortgage loan survival guide, if you will.
While confirming your income - the average lender will need to be made aware of at least 2 years of self employment history, occasionally they will request 3 years. They will ask to see this history verified in tax returns, generally. Occasionally the lenders may figure your income as being the average income you claimed on your income taxes as profits, not your gross business income. Another time the lender may figure your income as the lowest of the two years and every now and again as the highest of the two years. Talk to your mortgage professional or lender and find out their verification criteria. For instance, some lenders may calculate a part of your write-offs or deductions and work it back into your income. There are ideas of additional ways that a lender may be able to verify your income and if you are a free agent it may help you to be able to show a supplementary of your income.
If you can, compile a profit & loss statement , accurately quoting your expenses & profits for the last couple of years. You may find this tedious, but it could be used as proof of income for a mortgage provider. If you can get it signed or verified by your accountant, more's the better.
If you can, it's always best to provide your bank statements to prove your income - search for a lender who might accept as little as 2 years of statements as sufficient proof. These days, you'll find that many lenders confirm your income in this fashion. This is normally a more favourable method of proving your income than lifting the figures from your tax returns. The reason being that you can, more often than not, show that you have a lot more additional cash flow than your tax returns might indicate. When completing your tax returns you generally subtract every single business expense prior to your claim of any profits. By employing bank statements, you are still proving income, this reduces the importance of your credit score or deposit during the application process - while a "self-cert" or "self-certification" mortgage will place more emphasis on your credit score.
If you cannot provide statements apply for a "self cert", or "stated income" mortgage. This type of loan is very common these days. You actually need no proof of income, you simply state on the application form, the level of your income. It doesn't require verification on your part! This might help if you are freelance and need to specify your income as it currently stands. This method means that you don't have to worry about having the lender take your last two years worth of income and average them out. Whilst many people do abuse this feature, it's best to be accurate when self-certifying your income. Sometimes the lender will be able to obtain proof from your tax office to confirm your self-cert amount. Whenever you choose a self-cert loan, this will put more weight on the importance of your deposit and/or credit score. So, you might normally need one or both of these elements to be strong if you want to pursue this avenue. More often than not, when you do a self-cert, you could well be charged a marginally higher rate of interest because the lender will see this as more "high-risk".
Lenders make money by lending it to so they are always looking for ways to make it easier for you. There are several ways that lenders may work with you if you are freelance. The advice of a good, independent financial advisor is recommended and there are a proliferation of programs available to help you. If you can lay your hands on a deposit or you have good credit, you are halfway there! You're almost guaranteed to find a lender somewhere so don't despair!
Fabio Marcell is a seasoned contributor to many online and offline journals specialising in the financial sector. He has many years experience in the loans industry and is currently sponsoring the following website: http://www.a1-low-interest-loans.info (for web reprints please ensure this URL is hyperlinked) (c) 2005 Fabio Marcell - All Rights Reserved
How I Became a Hard Money Lender
Unlike other investors, my venture into real estate was a natural extension of my secondary business as the IP Ware software developer. However, opportunity and perseverance beget wealth, or at least a decent side income.
Option ARM Mortgage Loan - Is This Really for You?
What happened to the days of a 15 or 30 year fixed rate mortgage loan? Ultimately this is the safest and most popular mortgage loan product in our industry, but new mortgage products are hitting the market, and we in the mortgage business are using them to our advantage; ever heard the radio advertisement saying, "buy a $200K home for $643.28 per month; call XYZ Mortgage Company to apply"? The product used in this ad is called an Option ARM, and I feel it's my duty as a mortgage professional to tell you what this product is in case you happen to meet up with that loan officer whose only concern is to make a fee, and not have your best interest in mind.
Buying A Home? Reasons to Consider Financing Your New Home Loan Online
Financing your new home loan online can save you time and money. With information at your fingertips, you can quickly educate yourself about the loan process and compare mortgage lenders to find the best rates. With 24 hour access to mortgage lenders, you can lower your financing costs from the convenience of your home.
Bad Credit? With Poor Credit You Can Still Refinance Or Get A Home Equity Line Of Credit
Have you decided to refinance your home or apply for a home equity line of credit but worry about your credit rating? Even with poor credit it is possible to refinance your existing mortgage or obtain a home equity line of credit. New practices in the lending industry have made it easier than ever for you to refinance your mortgage or get a home equity line of credit. If you have adverse credit, specialized lenders can help you find the loan package your need with an interest rate you can afford.
What You Dont Know About The Real Estate Process, Some Inside Secrets
Some people in the real estate industry have a terrible reputation. Why, because they deserve it. A lot of hard earned money trades hands and if things go wrong that leaves a very bitter taste in the injured parties mouths.
Zero Down Mortgage Loans - Is 100% Financing a Good Idea and Can You Get Approved?
Are you wondering if you can get approved for a home loan with 100% financing? Are you also wondering if its a good idea to get a mortgage loan with no money down? Here are some points to keep in mind as you apply and consider your different mortgage loan options.
Secured Loans ? Making the Most of Your Home as Collateral
My visit to the lender was interrupted with my wife demanding a reason for my preference for secured loans. Though I hushed up the matter then, it kept on ringing in my mind hours later. Actually, I didn't know of options other than the secured loans that are available. The various instances of people that have lost their homes to lenders that she used to supplement her contention refused to leave my thoughts.
Online Home Equity Loans: A Basic Glossary
Home equity loans can be a great idea for individuals looking to get out of debt or make necessary repairs on their homes. During the process, you will come across a variety of terms and acronyms. We have gathered together some of the basic terms that you come across during your home equity loan. If you have any questions about any of these terms, make sure to consult with your mortgage lender.
Home Equity Line of Credit - Finding The Best Home Equity Lender
Borrowing against the value of your home using a revolving credit account is known as a home equity line of credit. Lenders offer home equity lines of credit in several ways with either fixed or variable interest rates. Information on obtaining a home equity line of credit is available to you from many sources, including online lenders. Make sure you compare loan products and lenders, and review the terms of your loan contract carefully before signing.
Tips for First Time Home Buyers
When looking at tips for first time home buyers, you've come to the right place. Many people are looking all over the Internet for reliable information. There's over 761,940 websites (as of March 05) with information or online forms urging you to fill them out for more details.
Tips for Finding the Best Agri Mortgage and the Best Agri Loan
The Research Rates of Agri Mortgage
Repayment of Loans ? Lessening the Bitterness of the Process
So how have you planned the repayment? Don't tell if you haven't started the plannings yet. It is high time the plannings and the decisions be made regarding the repayment of the loan. The amount of loan is a sizeable figure and planning for the repayment on the D-day will only make the repayment difficult.
Bad Credit Mortgage Lenders - Things You Should Know About Subprime Lenders
Interest rates and fees vary between subprime lenders just like regular mortgage lenders. Just because you have bad credit, that doesn't mean you should accept the first financing offer from a subprime lender. Take the time to do your research, and you can make sure you are getting the best deal in terms of interest rates and fees.
What to Really Expect for Closing Costs
Closing on a property is a very challenging time for a would-be homeowner. Being informed, either through your mortgage broker, your real estate agent, or through self knowledge is the best thing you can be when going through this procedure.
5 Home Buying Essentials
Purchasing a home involves certain important, even essential, steps that every buyer should take before closing on a purchase. Let's examine these "essentials" which, if properly implemented, can help you save valuable time and aggravation.
Save Yourself from Homebuying Disasters
Whether you are a first time home buyer or a happy home owner who wants to refinance an existing home loan, there are some cardinal "dos" and "don'ts" to follow. For many, home ownership is the biggest investment in their lives and that could be the reason why some people act irrationally, as if they purposely want to sabotage the deal. Follow these simple rules and you will be sure to make your experience difficult and unpleasant, if not a complete disaster.
First Time Home Owner Mortgage Loans
First time home owners are sometimes surprised at the complexity of the mortgage lending process. If you are searching for a mortgage and you have never owned a home, there a few things you can do to make the mortgage process less confusing. First time home owners should educate themselves on the home-buying experience before contacting mortgage lenders. There are many choices in obtaining a first time home owner mortgage loan. Friendly mortgage professionals are available to assist you in making the right decisions.
Home Equity Loan ? With a Reverse Mortgage, Your Home Pays You!
The home equity loan has become quite popular in the last five years, and Americans have tapped into the equity of their homes in record numbers. The reasons vary, although home improvement and debt consolidation are the most common reasons for borrowing against a home's equity.In the last fifteen years or so, a new twist has arrived in the home equity market ?- the reverse mortgage. Like a traditional home equity loan or line of credit, a reverse mortgage allows you to borrow against the equity in your home. Unlike those other options, you don't have to make payments in order to pay it back. The repayment takes place when you die, when you move, or when you sell your home. You must be at least 62 years of age to qualify, but unlike other loans, you do not have to have any appreciable income in order to get a reverse mortgage. There are a number of advantages of a reverse mortgage over a traditional home equity loan:Your options of receiving the money from the loan include a monthly payout, although you may also elect to receive a lump sum or a credit line. A monthly payout would effectively provide you with a regular "income" during the remainder of your time in your home.The loan isn't due until you move, sell the home, or die. There is no repayment schedule, as with regular installment loans. At the time of your death or when you sell the house, the loan must be repaid with interest.The amount you have to repay cannot exceed the value of your home. With this feature, you are protected should your home decline in value. The lender cannot force you to pay more than the value of the home. Due to the age restrictions on reverse mortgages, they are not for everyone. But if you qualify, it could provide an excellent opportunity to have an income during your retirement years.
Refinance Benefits - Refinancing Could Save You Money
The most common reason most people refinance is to save money, but many people refinance for various other reasons.
Home Equity Loans 101
A secured home loan differs from an unsecured loan in that the secured loan borrows against one's home as collateral, thereby reducing the risk to the lender.
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