Newly revised mortgage guidelines for self-employed people due to the Covid-19 pandemic: There are temporary requirements for assessing income derived from self-employment. The additional due diligence is due to the disruption from the pandemic. Mortgage lenders now need to consider if and how a business has been impacted and the likelihood of income continuance.
There is additional income documentation required and you may need an audited Profit & Loss statement with supporting documentation for the Profit & Loss statement. The continuity and stability of income is what will be considered. Read the rest of this entry »
I constantly get questions about whether or not someone who is self-employed needs a minimum of two years of tax returns, or if they can get away with one year of them, when qualifying for a mortgage. I thought I would answer this question and put it to rest. Please realize guidelines can change in the future. As of the date of this blog, the hyperlinks below are guidelines related to the history that self-employed people need, and the number of years of tax returns they need to document their income. Read the rest of this entry »
There were some big changes that came from Fannie Mae mid-December 2015 that signaled a further loosening in the mortgage guidelines. Some of the bigger changes are: Read the rest of this entry »
There is a requirement on Conventional loans to have a certain amount of your down payment come from your own hard earned savings. Not only do you need a certain minimum down payment for different types of Conventional loans, but you also need to make sure a certain amount comes from your own money, and not a gift, or borrowed funds, unless they are secured against an asset, like real estate or a stock account.
On a Conforming loan, which are loans that go up to $417,000, the minimum down payment is 5% down. Read the rest of this entry »
If you have a joint bank account with another person, and that person is not going to be on a mortgage loan application with you, you will need something called a full access letter from the other person.
This would verify to the underwriter that you have access to use that money for settlement, if needed.
I have seen the need for a full access letter in the following scenarios:
Read the rest of this entry »
I have had far too many transactions blow up completely or get delayed because the client makes a financial move that they should not during the transaction. Mortgage borrowers should keep all finances static for the two months prior to buying, as well as during the transaction. Consult your loan officer before ANY financial changes. Do not take a new job, do not transfer money around, do not sell your vintage guitar collection Read the rest of this entry »