SELF EMPLOYED? 5 STEPS TO HELP YOU GET A MORTGAGE

If you are among the thousands of American's who are self-employed, you many think you are now in a position to buy a home or refinance your existing home.

Albany, NY (prHWY.com) September 27, 2012 - If you are among the thousands of American's who are self-employed, you many think you are now in a position to buy a home or refinance your existing home. Even with good credit and sufficient assets, you'll find that even the best mortgage lenders will require you to produce your tax returns and possibly your quarterly profit and loss statement to show that you have sufficient income to make your mortgage payments. If you are self employed, you may have a few more hoops to jump through than some people. You'll want to wait until you have 2 years of self-employed tax returns before applying for a new mortgage so your self-employment income will be included in your application. NY Mortgage Companies recommend the following 5 steps to help you secure that mortgage a little easier, whether you are looking for first time home buyer loans in New York or home mortgage refinancing.

1.Good Credit All borrowers need good credit, with a minimum score of 620 or 640 for an FHA loan and a score of 740 or higher to be offered the best rates for a conventional loan. Some lenders consider self-employment income a higher risk than regular paychecks, so a higher credit score can offset your potential risk factors and give a lender greater confidence when considering you for a loan.
2.Low Debt-to Income Ratio Lenders typically like to see a 41% of less debt to income ratio. Paying off some bills to reduce your ratio can be a compensating factor in your favor.
3.Income Many self-employed people reduce their income to tax purposes by deducting business expenses. Beware that your income for a mortgage loan will come from your tax returns. If your income is low you may qualify for a smaller mortgage amount than you thought. Albany mortgage brokers remind you that your income will usually be figured on the average of your two most recent tax returns. Lenders often require a quarterly profit and loss statement in addition to your most recent tax returns.
4.Assets If you are doing home mortgage refinancing, your mortgage will be based on the amount of equity you have in your home. If you have experienced declining home values in your area, you may want to consider a "cash-in" refinance which builds your home equity faster and if you are under water on your loan, can bring you back above water. If you're looking for first time home buyer loans in New York , a larger down payment can make it easier to qualify for a mortgage, since the loan amount will be smaller
5. Reserves The rules about how much you need to have in cash reserves may vary from lender to lender as well as for different mortgage products. You should expect to have at least 2 months of housing payments in the bank to protect yourself in an emergency. Lenders will need to see that self-employed borrowers, whose income fluctuates more than regular employees can handle their finances and have savings.
Visit www.firstratefunding.net for more information.

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Tag Words: albany refinancing, albany mortgage broker

Categories: Real Estate

Press Release Contact
First Rate Funding Corp.
Rosewood Plaza
427 New Karner Rd.,
Albany, NY
518-452-4700
www.firstratefunding.net

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