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Posted On Tuesday, 06 April 2021 00:00 Written by
Posted On Monday, 05 April 2021 00:00 Written by

“I watch other teams and ask myself, ‘What makes them win? Luck? Scheme? I’m constantly thinking of how to be better.” NIT Champion University of Memphis basketball coach Penny Hardaway

The spring market in 2021 is running hot right out of the gate.  Inventory of homes available are fewer and mortgage rates are still a little lower than the beginning of April last year. It's a terrific market for home sellers because of the ease of selling higher. It is an excellent win for homebuyers because they can lock into a fixed-rate mortgage rate that keeps their payment affordable.  If you are a homebuyer in this market, get teamed up with a very reputable realtor and mortgage lender.   With some persistent grind and savvy strategy from you and your realtor-lender team, you can win in this market. 

University of Memphis Tigers basketball coach Penny Hardaway said in an interview last week after Memphis won the NIT championship, "I watch other teams and ask myself, 'What makes them win?  Luck? Scheme?' I'm constantly thinking of how to be better."

Here are some strategies I see buyers using to get their home purchase offer accepted over multiple offers—being better is not always about price.

1. Get a very strong preapproval letter from their lender.  Having a local lender that people know can work in the buyer's favor.
2. Try to get a preapproval letter with the least number of contingencies.  If you know you will sell your current home later, go ahead and get mortgage approval qualifying with both the new mortgage payment and the old one, so your offer is not contingent on the sale of your home.   Lenders can help you find money to use for down payment until your old house sells.
3. Be flexible on the possession date. The sellers may feel better knowing they can stay in their home a few days after closing and take their time moving.
4. Be willing to pay up to a certain dollar amount for repairs on the home you are buying. 

These are just a few of the strategies buyers can use with their realtor-lender team because it is not always the highest price that wins. Many times, it is the surest offer.  

Posted On Monday, 05 April 2021 00:00 Written by
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Posted On Wednesday, 31 March 2021 00:00 Written by
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Posted On Tuesday, 30 March 2021 00:00 Written by

“It’s simple arithmetic: Your income can grow only to the extent that you do.” T Harv Eker

The pandemic year of 2020 caused some business people to prosper, and others have had to struggle to survive.  As a mortgage officer, I have heard customer stories as they describe their trek to keep home and business lights burning.  Mortgage rates are low and expected to stay relatively low through the year. However, the price of those rates has been rising over the last couple of months by about a half-point since January 2021. 

Business owners and workers who have experienced a gap in income during the lockdown period last year have been trying to recover as the marketplace opens again. For these beleaguered borrowers, we, as lenders, need to spend some time finding ways to get them enough income to qualify for the home loan they need to move forward with the life they want.   

Here are some solutions we have found for borrowers who were off work for a few months but returned to work.  

W2

If you are an employee on a salary or paid by the hour, you still may be able to qualify if you are back to working in the same line of business where you have the experience, and you have guaranteed income from your employer. 

Search for other income sources such as investment income or pension income.  Consider adding a co-borrower or cosigner to the loan if the borrower has additional resources to make the mortgage payments easily. Explore ways to restructure other debts or pay off some debt to reduce the amount of income needed to qualify for the mortgage. 

Self-employed

If your business suffered last year, but you still show enough net income after expenses on your 2020 tax return, you may still be able to qualify to buy a home or refinance your existing loan to better terms. Your lender can go over your tax return to find expenses that are sheltering you from taxes but can still be added back to your income for loan qualifying purposes.  

Some of the expenses that can typically be added back to qualifying income are depreciation or depletion write-offs, depreciable business miles, deductions for business use of your home, and once-in-a-lifetime expenses.  

Other solutions for getting self-employed borrowers approved for a mortgage are to document debts paid by the business for the last 12 consecutive months that are already deducted from business income.  Suppose the car payments and other debt appear on the borrower’s credit report but are paid by the business, and the  payments on those debts have already been deducted from business income. In that case, the chances are good those debt payments can be omitted from the total income-to-debt ratio.

As real estate and mortgage professionals, taking the extra time to explore the best solutions for our customers gives us trusted advisor status with the people we serve.  The solutions we help them find gives our customer hero status with their loved ones.  

Posted On Monday, 29 March 2021 00:00 Written by
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