Is It Possible to Get Mortgage Financing if You Are Self-Employed?

Man and woman working together at home
If you are self-employed and want to purchase a home, it is possible to apply and get approved for mortgage financing. However, unlike traditional employment where you receive a W2 you can use to verify income, you will need a little bit more documentation.

Lenders want to see steady, if not gradually increasing, income for at least the past two years. They will ask you to provide tax returns showing your adjusted gross income. They may also require you to submit copies of bank statements and other types of documentation in order to verify and support the self-employment income you reported on the mortgage application.

In addition, you will want to make sure you have good credit. A good credit history demonstrates your ability to pay your debts from your self-employment income. If you have a business, lenders may review your business credit as well.

Other things that can make getting approved easier include:
  • Having a sizeable down payment. The more money you can pay down on the home, the better. This shows lenders you have a financial stake in the home.
  • An emergency savings fund. Lenders will want some reassurance you can make mortgage payments for those times when your work may go through seasonal slowdowns.
  • Having a co-signer with a “regular” job. Lenders are more likely to approve a mortgage when there is a secondary source of income supported by W2 employment.
To learn more about what home loan types you could qualify for using your self-employment income, please feel free to contact Elite Financial at (800) 908-LEND or (805) 494-9930 to speak with a representative today!

How Home Loan Refinancing Can Help You Pay Less for Your Mortgage

Happy woman dreaming of new house
If you want to lower your monthly mortgage financing payment, loan refinancing may be right for you. There are a few different ways of refinancing could help reduce monthly payments. Refinancing is not a second mortgage but applying for a new home loan to pay off the existing home loan.

There will be costs associated with closing on the new loan since you will need to close on the loan, just like you did when you purchased the home. You may also have to get a current appraisal of the home. It is important to make sure you understand the costs associated with refinancing when choosing a refinancing option that is best for you:
  • Refinance for a lower interest rate while keeping the same number of remaining payments as the original mortgage. For example, if your current interest rate is 6% and you can refinancing at 4%, without altering the repayment period, your monthly payments will go down since you will be paying less interest.
  • Refinancing the repayment period on the existing loan for a longer period. For instance, if you initially have a 15-year fixed rate loan, refinancing to a 30-year fixed rate loan will lower the monthly payment. Just keep in mind, you could end up paying more in interest because the loan is much longer.
Depending on your financial situation, there could be other refinancing options available which could help lower your monthly payments. To learn more about these or to apply for refinancing on your home, please feel free to contact Elite Financial at (800) 908-LEND or (805) 494-9930 to speak with a representative today!

Five Home Buying Tips for Millennials

Happy young couple dreaming new house
When we think about millennials, we may not always associate this generation with home ownership. Yet, for some millennials, moving from renter to property owner is starting to become more of reality. How these millennials are able to afford a down payment and buy a home is simple: They have taken the time to familiarize themselves with the process of buying a home and what is required, along with using the following tips:
  1. Create a budget and stick to it. A budget ensures that you know exactly where every dollar is spent, and it can help you reduce spending. By reducing spending, you will have extra money left over each month.
  2. Open an interest-bearing savings account. Next, take all that extra money you have left over and put it into a savings account.
  3. Learn how to use coupons and shop sales ads. Another way to cut spending is by adjusting your shopping habits. If it is not on sale, and you don’t have a coupon for it and can wait, then don’t buy it now.
  4. Learn how to cook and prepare meals at home. One of the biggest things millennials enjoy is dining out constantly. By cutting this expense and reducing dining out time to once every week or every other week, you will have more money to set aside to buy a home.
  5. Get preapproved for mortgage financing. Doing so will give you a better idea of how much home you can afford and how much you need for a down payment.
To learn more about the home-buying process and to get preapproved for a home loan, please feel free to contact Elite Financial at (800) 908-LEND or (805) 494-9930 today!

Is Applying for Mortgage Pre-Approval Important or Required?

Approved mortgage loan with house key
apply for mortgage pre-approval before making an offer on a home, it certainly is beneficial. It is important to mention that pre-qualification and pre-approval are not the same things. With pre-qualification, lenders use the information you supply, without any verification, to determine how much they are willing to borrow. With pre-approval, you go through the same verification processes, just like you were applying for your mortgage. The end result is an exact amount of money lenders will borrow you to purchase your home. Completing pre-approval processes unlock these added benefits:
  • Sellers will know you are serious when you make an offer.
  • Sellers tend to favor buyers who are pre-approved rather than having to wait for you to secure financing.
  • You will save time by not looking at homes that are outside what you can afford.
  • You will know the minimum amount of money you will need down to finalize the mortgage.
  • You will have an idea how much additional money you will require for inspections, closing, and so on that you cannot finance.
  • You will know what homes you can afford and whether you will need a larger down payment to get the home you truly want.
  • You will know if there are things on your credit report you need to clean up before reapplying to get a lower rate or a higher mortgage amount.
As you can see, taking the time to get pre-approved for a mortgage is well worth it. To start the pre-approval process, or if you have further questions about different mortgage financing options, please feel free to contact Elite Financial at (800) 908-LEND or (805) 494-9930 today!

Don’t Put Off Your Summer Home Makeover – Get a Cash-Out Refinance

Luxury home with pool at sunset

A cash-out refinance mortgage loan is where you refinance your existing loan and, at the same time, convert your available equity into cash. You could qualify for as much as a 90% LTV (loan-to-value) mortgage!

The great thing about refinancing your home and using it for a summer home makeover is you can increase the value of your property. Some great ideas of what you can do with the cash from your refinance loan include:

  • Enclose your backyard with a privacy fence.
  • Enclose your patio.
  • Renovate your patio/deck.
  • Build a covered outdoor kitchen/entertainment area.
  • Get a new garage door.
  • Add a new room to your home.
  • Install an in-ground pool.
  • Finish your basement and turn it into a man cave, game room, playroom, or she-shed.
  • Have solar panels installed on your
  • Get new energy efficient windows installed.
  • Increase the amount of insulation in your home.
  • Remodel your kitchen with new cabinets, countertops, and energy-efficient appliances.
  • Renovate your bathroom and turn it into your own personal “spa.”
  • Get a new tankless hot water heater installed.

After all the makeover projects are completed, you can even use part of the cash you receive to take a much-needed vacation!

One of the great things about refinancing, compared to using credit cards or other loans, is you have a single monthly payment with a fixed interest rate. To learn more about refinancing your home and getting cash out for your summer home makeover, please feel free to contact Elite Financial at (805) 494-9930 today!