Real Estate Information

Coastal Real Estate Blog

Kathy and Michael Rain - The Rain Team

Blog

Displaying blog entries 401-405 of 405

Getting a Loan When You Are Self Employed

by Kathy and Michael Rain - The Rain Team

The San Mateo Coast community has a spirit of entrepreneurship which helps define our culture. For many, owning their own business and being their own boss sounds like a dream come true. However, if you are self employed you most likely know that owning your own business can be stressful and overwhelming at times. 

But while being a business owner is a great deal of work, it is part of the American dream. The downside is that if you are in the market to purchase a new home in San Mateo and are planning on applying for a loan based on your self-employment income, you may be faced with some challenges you weren't expecting.

Unfortunately the current economic situation has forced many lenders to tighten their requirements and that may make getting a loan more difficult than in past years for self employed home buyers. Here's the score on what today's lenders are looking for. 

1. Forget about a 'stated income' mortgage - you are going to need tax documents, bank records and at least a two year history of business stability for a lender to even consider your application. Even if you are just branching out in the same kind of business that you have done for years, expect tight requirements and nearly perfect credit to move forward with qualifying.

2. Do your homework - research the banks or mortgage lenders you want to approach and find out exactly what paperwork and documentation they require to process a loan for a self-employed borrower. Spend time putting your documents together carefully and thoroughly in advance of your application.

3.. Look for lenders who have a track record of accepting self-employed borrowers and try to meet with them in person to review your paperwork and find the right kind of loan package for your needs and situation. 

4. Take a break from write-offs for a couple of years - those tax deductions help with your disposable income, but they also take down your gross income level. Lenders want to see a good debt-to-income ratio,not how clever you are about expensing your income away. Direct any questions about how to manage your expenses and write-offs to your CPA. 

5. Stay liquid - build your bank account so that lenders can see your ability to make payments even if you have seasonal or other fluctuations in your income levels month to month or year to year. A solid savings plan and liquid assets can be helpful in getting your application approved. 

Finally, if you have a strong co-signer, one with great finances and a steady income, you may be able to overcome your lender's concerns and hesitation when it comes to considering the source and level of your personal income. Are you self employed and have more questions? Contact me for more information, I would be happy to help! **

Uses and Benefits of the VA Home Loan Program

by Kathy and Michael Rain - The Rain Team

The Department of Veterans Affairs guarantees up to a quarter of a qualified borrower’s mortgage. That guarantee is what spurs VA-approved lenders to provide loans with competitive terms and interest rates to military buyers. VA Loan Uses Qualified borrowers can use a VA loan to purchase, refinance and in some cases construct a home. They can also use the loan to buy and repair a home at the same time. Other acceptable VA home loan uses include:

• To refinance an existing VA-guaranteed or direct loan
• To buy a single-family residential unit in a VA-approved condominium
• To buy a farm residence that is owned and occupied by the veteran However, these loans do come with limitations. Veterans and active-duty military cannot use a VA loan to purchase land, investment properties or a home that will not be the owners primary residence. Benefits of VA Loans Due to the nature of the military lifestyle, constant moving from station to station and deploying overseas can cause a service member to struggle when building a strong financial profile. Good thing the VA loan specifically caters to these needs. VA home loans have the amazing benefit of not requiring a down payment. Some scrutinize this, declaring it can cause a person to bite off more than they can chew; however, the VA home loan program also has one of the lowest foreclosure rates of any lending program. The majority of counties across the nation have an ample loan limit of $417,000 (this limit can eclipse $1 million in certain high cost counties) which means service members can purchase the home of their dreams without putting a single dollar down. Over 80 percent of veterans who have taken advantage of this great program say this is the number one benefit. Not only can a veteran receive a high limit loan without putting anything down, but also they will not have to pay any private monthly mortgage insurance. Some other major benefits include:

• Less stringent credit requirements
No pre-payment penalties • Higher allowable debt-to-income ratios than conventional loans In the last post, we’ll take a look at VA loan eligibility and the loan limits placed on this program. Kevin Pearia is a mortgage commentator for Veterans United Home Loans, the nation’s leading dedicated provider of VA home loans.

FHA Extends Waiver of Anti-Flipping Regulations Through 2012

by The Rain Team

The home market has been up and down for years in not only San Mateo but the entire county.In an effort to stabalize home values and improve conditions in communities with high foclosure rates, the FHA has extended anti-flipping regulations. The Acting Federal Housing Administration (FHA) Commissioner Carol J. Galante will extend FHA’s temporary waiver of the anti-flipping regulations. You can visit the FHA homepage here for all the ifne print and additional information. With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days. In 2010, FHA temporarily waived this regulation through January 31, 2011, and later extended that waiver through the remainder of 2011. The new extension will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities. The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA. All other terms of the existing Waiver will remain the same. The Waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers. The Waiver continues to be limited to sales meeting the following conditions: *All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction. * In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value. * The Waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program. Contact us if you have any questions about the anti-flipping regulations!

VA Loans: Eligibility and Financing

by The Rain Team

On average, VA loans are typically easier to qualify for than a conventional lending program. The program still provides significant financial benefits despite the fact that only a fraction of our nation’s veterans and service members have taken advantage of their benefits. What is even worse, is according to a study by the Department of Veterans Affairs, nearly 20 percent of veterans don’t even know the program exists.

 

  • Qualifying for a VA loan VA loans are fairly easy to qualify for. Prospective buyers must have only: Served 181 days on active duty during peacetime or 90 days during wartime Served six years in the National Guard or Reserves Be the spouse of a fallen service member who died due to a service related injury.

Those who fall into one of those categories must take the next step of filling out a Certificate of Eligibility, or COE. This official VA document proves you are able to participate in the program and have met the service requirements. Applicants can obtain these through the VA directly or through an approved VA lender. VA officials must look over the Certificate of Eligibility and ultimately determine whether a prospective borrower can participate. The Department of Veterans Affairs doesn’t give explicit income or credit standards to qualify for the program, since the VA doesn’t issue the loan. Income and credit standards are given by VA-approved lenders, which generally require a minimum score of 620 to qualify. Interest Rate Reduction Refinancing Loan (IRRRL) The VA’s IRRRL, or streamline refinance, gives current VA home loan holders the opportunity to take advantage of the market’s low interest rates. Prospective borrowers should remember that for this to be worth their while, they should make sure the new interest rate is lower than the current rate and that you can’t refinance a FHA or conventional loan through the IRRRL. This program isn’t for everyone, but for those looking to lower their current interest rate, it is a great option. For more information on the VA home loan program and the VA’s IRRRL, contact a VA-approved lender like Veterans United Home Loans, the nation’s leading dedicated provider of VA home loans. Kevin Pearia is a mortgage commentator for Veterans United Home Loans, the nation’s leading dedicated provider of VA home loans. **

Should I Buy a Home Now?

by The Rain Team

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

Displaying blog entries 401-405 of 405

Syndication

Categories

Archives

Contact Information

Photo of The Rain Team Real Estate
The Rain Team
CA# 01169588 | CA# 01125976 | CA# 01908304
248 Main Street, Suite 200
Half Moon Bay CA 94019
Michael: 650-888-6361
Kathy: 650-888-6903
Fax: 866-396-0207

Kathy and Michael Rain of Coldwell Banker provides real estate services in the San Mateo County, California area including the surrounding communities: El Granda, Half Moon Bay, Montara, Moss Beach, Pacifica and San Mateo. Search for homes in San Mateo County. We list and sell residential real estate, investment properties, vacant land, lots for sale in the San Mateo County, California area.

Licensed in the State of California

Kathy Rain - CA BRE# 01169588 | Michael Rain - CA BRE# 01125976 | Coldwell Banker - CA BRE# 01908304
Cell Phone: (650) 888-6903 * Direct Phone: (650) 712-0411
San Mateo County Real Estate and Homes for Sale

Equal Housing Opportunity