Stated-Income

Smart Home Buying Tips: Steer Clear Of These Home Buying Mistakes

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Mistakes can happen to anyone. In home buying, making mistakes can definitely cost you a lot but it’s still possible to avoid them. A lot of home buyers can easily get overwhelmed by the entire home buying process. This is one reason why mistakes do happen in home buying.

Smart home buyers make sure that they’re prepared, not only for going through each step of the home buying process but also for them to be ready for possible mishaps that may happen.

In order for you to avoid these mishaps and problems from happening, here are some home buying mistakes you have to steer clear of.

1. Buying a home that doesn’t meet safety standards

Buying a home means you have to find the perfect home for you. It’s also important that you find a home that’s safe to live in. Otherwise, you might end up paying more for repair costs after you bought the property.

When you look for a home to purchase, make sure that it lives up to your standards and would not compromise your safety. Ask if the property meets safety standards or consider getting a home inspection on the property before you make a decision.

We’ll guide you to your first home.

2. Buying a home beyond your budget

It’s also very important to buy a home within your budget. If you get carried away and purchase a home that’s a little higher than your limit, you will end up having more to pay for in your mortgage and it could make you be at risk for delinquency or foreclosure.

One way to make sure this does not happen is for you to get a mortgage pre-approval. If you get pre-approved for a mortgage, you will get a specific budget. Once you do, this will become your basis in choosing which home to buy.

3. Not being able to save enough money for the costs

It’s always important to save a good amount of money in order for you to have accessible funds that will cover your down payment, closing costs, and other needed home buying expenses.

Save as early as you can. If possible, you can also get creative in boosting your home buying savings fund. This way, it can speed up for home buying time frame and become a homeowner before you know it.

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4. Not seeking guidance from experts and professionals

Getting help from mortgage lenders and real estate agents is one way to assure that you can have a smooth home buying process. This is especially true for first-time homebuyers.

As experts in their field, you can get some good advice on how to go through different challenges that may come along. Without them, you may not have a smooth-sailing homeownership journey.

5. Hurting your financial profile before closing

Finally, always be mindful of your credit and other financial statements if the loan has still not reached its closing. One mistake you need to avoid is to make sure you don’t hurt your credit.

Even if you’re already near the end of the process, you can still be deprived of a mortgage if you hurt your financial profile. Avoid buying big ticket items that may hurt your credit. You have to keep your eyes on the prize and that is homeownership.

Ask our experts today.

Side Hustles You Can Do to Increase Your Income

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If you’re planning to buy a home, you need to get your finances ready. That means you should have more than enough money saved to cover all the out-of-pocket costs that come with home buying.

Sometimes, your job doesn’t help you save a lot of money. You still have your bills and daily expenses to think about. As a result, your savings might only grow at a very slow pace.

If you have extra time on your hands, why don’t you try making more money by engaging in a side hustle or two?

For example, the internet can be your money making source. There are quite a lot opportunities online if you just know where to look for them.

Here are some money making ideas you can do on the side that might help you save money to buy a home.

Teach a skill

Whether it’s one-on-one tutoring or signing up to teach online classes, there’s good money that can be made by teaching a skill you’re good at.

If not, you can offer old-fashioned tutoring skills to elementary, middle, and high school student for some subjects that they find very challenging.

Take photos and sell it

If you have a good eye for photography, selling your photos online is also a good way to help augment your income.

Notable stock photo resources like iStock or Shutterstock are just some of the sites that give royalties to photographers who send out their work.

Ask our lenders today.

Blog or vlog

Starting a vlog or a blog is easy. Maintaining one, on the other hand, requires a good amount of work.

You also need to learn how to earn money through these resources. Usually, ads and sponsorships are what can help you earn that extra income.

Sell out your stuff

Perhaps the easiest way that will help increase your income is to sell your stuff. You can sell the stuff you don’t need online or through organizing a garage sale.

You can also decide to rent out your equipment at home. This may be party supplies, tents, projectors, and other equipment that may come in handy to others.

Be someone’s social media manager

Do you know that there are brands that seek social media managers? What’s good about this opportunity is that tasks like these can be done remotely.

New brands or products need promotion but since these companies are still starting out, it’s costly for them to hire big PR firms.

That’s why owners usually look for social media managers who can do the job of promoting their products online.

Be a virtual assistant

There is a growing need for virtual assistants all over the country. These job openings can be from small companies or self-employed entrepreneurs and business owners.

Virtual assistants help business owners do small organizational tasks that help them keep the business running.

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There’s a perfect side hustle for you

In the end, it takes skill and creativity to decide which side hustle is perfect for you. These may be little money making ideas but they can still allow you to increase your incomeUltimately, this helps you save more than enough money to buy your dream home.

Be one step closer to homeownership.

Getting a Stated Income Loan? You Should Prepare These Documents

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You’ve probably heard about stated income loans by now. In fact, there are a lot of individuals who are looking into this type of loan. After all, it accommodates those who could not qualify for a conventional loan. But even if this loan exists, there are still some documents or paperwork that comes in handy when you apply for one.

In a nutshell, stated income loans are perfect for those who are either self-employed, small business owners, or retirees. This loan type once lost its popularity after the mortgage crisis took over in 2008.

But things turned out differently this time. There is now a demand for this type of loans again. And together with the rule that requires lenders to make sure their clients have the ability to repay, stated income loans are slowly making a comeback.

And while stated income loans have a more relaxed set of guidelines, lenders still need to see significant documentation that would prove your ability to pay off your mortgage. But unlike conventional loans, borrowers would have to produce a unique set paperwork that stated income lenders would likely require.

CPA Letter

For self-employed borrowers, a CPA letter verifies your self-employment status. This is secured from the borrower’s CPA or tax preparer. This proves the accuracy of your employment status or business information.

The letter contains significant information like the applicant’s name, business name, address, and phone number. The nature of his or her business, the percentage of ownership, and the years that the business has been operating is also included.

Bank Statements

It’s important to secure a record or copy of your bank statements when applying for a stated income loan. Lenders would still need some kind of verification of your assets and a record of your banking activities or transactions can accomplish this.

It’s important to note that you are the one who needs to decide which bank statement to show your lender. For small business owners, choosing to show your business account could make a difference if you don’t own 100% of the business. That’s why it’s important to be particular when making this decision.

Rental History

For both first-time and repeat home buyers, showing your financial responsibility can be done by providing a history of your rental payments for at least the past 12 months. Lenders would usually look into this piece of document to verify that you are responsible enough to take out a mortgage.

This could be obtained directly from your landlord through an official Verification of Rent form or from your bank account. Rental history through your bank account could be shown through canceled checks. This would prove that you pay your rent with the date that your landlord cashed it and that you continually pay it on time.

IRS Form 4506

Some lenders would require an IRS Form 4506. Even if you don’t need to show your tax returns, the form will verify that you responsibly filed your taxes. The income reported on your transcript would not be that important.

When lenders verify this piece of information from you, it protects them by knowing that they can take a chance in providing you a loan even if you could not give a full documentation of your income.

The Bottom Line

In the end, each lender differs from the other. But these documents are some of the most important ones. It’s important to also remember that even if this type of loan has flexible guidelines, lenders would still need proof that you can handle the responsibility of carrying a loan.

And since these guidelines are generally achievable, it’s understandable that stated income loans would still have a unique and careful qualifying process since it can carry more risks than most standard loans. That’s why it’s important that, as a borrower, you do your end of the preparation and show your lender that they can trust you.

Eyes On The Prize: Ways To Save For a Down Payment On a Home

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Since the moment you decided to buy a home of your own, you have probably heard it all by now. Save for a down payment, plan ahead, gather all the paperwork, increase your income and all that jazz. And while you go through all that process and preparation, there are a few struggles that you need to deal with as you go on.

For starters, applying for a loan can be quite strenuous. Getting approval means you need to go through the necessary steps to qualify and that has its own hurdles. House hunting is another thing, too. You need to look for the perfect house that fits your needs. You need to know that the property you’re about to purchase is something that you can live in for the long haul. These are only some of the few things you need to go through when buying a house.

Along with those things, there’s definitely no denying that saving money for a down payment could be a little tricky especially if you aren’t very particular about it. Sure, there are home loans that come with lower or no down payment required. But on the surface, buying a house doesn’t come cheap. But there are simple ways that could help meet your goal in saving enough money to put down for a house. Here are some ways:

Try a side hustle

If you have extra time on your hands, you might want to monetize a skill that you are a master of. If you are a crafty person, maybe it’s a good idea to put your creation out there. Sell a product you know how to do. These days, people are into homemade and/or products that are easy to learn. If you like that, you can make some and sell it to your friends too.

Other than that, your side hustle could be something like tutoring, copywriting or even dog sitting. If you are willing, profits from extra income could help add up to your savings.

Consult our lenders here.

Prioritize your expenses

Know where your money should go. List things of importance. Sacrifice some of those that you don’t really need. The goal is to end up with more money saved than spent.

These could come from the simplest things. If you already have a lot of clothes, maybe you could forgo the latest fashion sale in the market. Subscriptions could be cut down, too. For example, if you don’t need cable subscription because you spend most of your time at work or you’d rather watch your favorite shows on your phone then you can cut that down from your expenses, too.

Try not to add up more debt

This is something you hear quite a lot. But then it bears repeating, too. Minimize your credit card usage as much as possible and don’t add a new credit card on your account. That would only encourage you to spend some more. This doesn’t only make you owe more money. It could also put a dent in your credit score which could lessen your chances of qualifying for a home loan.

Write it all down

It’s quite helpful if you track all your expenses and savings. This way, you would know where your money is going. It’s also a good strategy if you want to evaluate and restructure your spending habits. In the end, it pays to be on top of all your finances.

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A Quick Guide To Home Buying For Self-employed Individuals

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If there’s one thing every home buyer has to face, it’s the different hurdles that need to be dealt with. But then if you’re self-employed, the struggle is even more stressful.

It’s no secret that buying a house is not a walk in the park. Everyone has to go through a long and winding road of loan applications, processes, and waiting games.

Getting a mortgage is especially harder for them and applying for a loan is only the tip of the iceberg. This is why it’s best to plan ahead and prepare for what you’re about to deal with. And although preparing doesn’t promise a 100% stress-free process, it would definitely take a lot of the burden off.

Improve you credit

If you’re self-employed, you might want your lenders to see that you have a satisfactory credit score. Lenders usually use this as a basis for approval as well as getting the best rates for you.

However, boosting your credit doesn’t happen overnight. To keep your status in check, try to keep your balances low. Continue paying your dues on time. And during your mortgage application process, try not to apply or open other credit lines and add up more debts in the process. This usually doesn’t give a good impression for most lenders.

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Organize your expenses

It’s not illegal to keep both personal and business expenses under the same account but it’s not really a good idea if you want to prove the state of your income.

Other than making a good impression, lenders tend to have an easier job in going through your expenses by keeping separate accounts for business and personal use. This also helps you deal with taxes with lesser frustrations.

Prove your ability to pay

Of course, lenders would like proof that you can carry on a mortgage in the long run. Before they grant a loan, they want to know if you can pay them back. This is why they look into your income, through necessary documents.

In cases where you’re self-employed or running your own business, they would need to verify the existence of your business by asking for proof of your business license, a letter of verification from a Certified Public Accountant or an Enrolled Agent.

Prepare the paperwork needed

Secure the necessary documents your lender might need. These would prove that you can be trusted with a mortgage.

Along with showing your business license and CPA letter, documents like bank statements, tax transcripts, and the like are usually looked into.

Look into different loan options

Try to shop for loans that you think you could qualify. You can check if you can try your luck with a traditional mortgage and see if you can score a loan.

But if you can’t there are alternative loans that cater to unique situations just like self-employed borrowers. Try to research about different non-qualified loans like stated income loans and others. Ultimately, be careful when you choose a mortgage. Weigh in your options carefully before you jump to a decision.

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