First Time Buyers

Mortgages for Self-Employed People

Getting approved for a mortgage takes determination. Getting approved for a mortgage can be even more daunting when you are self-employed. You will typically need to show more documentation related to your income, assets, debt-to-income ratios (DTI), and taxes. Knowing what is involved beforehand is helpful in making the process proceed smoothly.

First Things First

When you are considering getting a mortgage, remember that the lender wants to see that your income is consistent and stable. Make sure your income tax returns are completed for the last two years. If you have not filed your current taxes, you can submit a profit and loss statement as long as it is audited by a certified public accountant (CPA). A lender generally takes an average of your yearly income for the last two years. 

Credit Scores

The higher your credit score, the easier it will be to obtain a mortgage. If your credit score is under 700, you may wish to work on improving it before applying for a mortgage. Monitor the three credit scores to make sure that all the information on it is 100 percent accurate. If not, correct any errors as soon as possible. 

Assets

To offset a lower credit score, or if your business is not currently generating the income you would like, consider a larger down payment. You may want to put 20 percent down, even if the lender is asking for five percent, to compensate for a riskier income profile.

Debt-to-Income Ratio

Debt-to-Income ratio (DTI) is a formula used by the mortgage industry that determines if your income is sufficient to repay the mortgage loan that you are applying for. It is broken down into two components. It will calculate what your new mortgage payment will be and divide it by your stable monthly income. For example, if you earn $4,000 monthly, and your loan will require monthly payments of $1,000, your housing DTI will be 25 percent. Lenders usually would like the ratio to be 28 percent or lower. The mortgage payment includes any property taxes, insurance costs, private mortgage insurance if applicable, and homeowner’s association fees. 

DTI is also calculated with all of your recurring debt besides housing and can include credit card payments, car loans, child support, utility bills, and other expenses. Lenders are looking for your DTI ratio to be approximately 36 percent. However, if your down payment is substantial and you have good credit, a lender will look at the total picture to make their decision.

Superior Mortgage Company, Inc. specializes in residential and commercial loans, providing a wide range of products and services to give you the best options for your mortgage loan. Regardless of whether your credit score and DTI ratios need improving, we want to help. We will help you make the smartest choice because our experience and skills are second to none. Call Superior Mortgage Company, Inc. at 845-883-8200 or email sales@superiormci.com for additional information. Let us help make your dreams a reality. 

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Fair Housing Rights for First Time Buyers

Looking for your first home can be an exciting time. It can also be a frustrating time if your efforts to find your perfect house are blocked by unfair or unscrupulous practices. Under the Fair Housing Act, housing discrimination is illegal in almost all housing whether it is private, public, or housing funded by the federal government.

Although the Fair Housing Act covers most housing, it does not cover single family homes sold or rented by the owner without the assistance of a real estate agent, housing belonging to religious organizations, private clubs that do not allow occupancy unless you are a member, and owner-occupied buildings with under four units.

Discrimination is Illegal

HUD’s Office of Fair Housing and Equal Opportunity (FHEO) is committed to ending housing discrimination and promoting economic opportunity through their housing laws. If you think that you may have been denied housing because of your race, gender, family status, national origin, color, disability, or religion, in violation of fair housing laws, you can file a complaint with the FHEO. 

Some examples of discriminatory practices may include:

  • Refusing to rent or sell property;
  • Denying that housing is available;
  • Evicting you without due cause;
  • Discouraging you from buying or renting;
  • Harassing you;
  • Retaliating against you because you filed a complaint;
  • Imposing different sale prices or rent charges based on your protected status;
  • Attempting to stop you from renting or buying by using threats, coercion, or intimidation; and,
  • Delaying or ignoring maintenance requests.

Housing providers must make reasonable accommodations and can modify or replace existing structures to help disabled individuals, and certain multifamily housing must be accessible to people who are disabled through the Americans with Disability Act (ADA).

Discriminatory Mortgage Lenders

Mortgage lenders, such as Superior MCI, are committed to providing fair and equitable loans and other financial assistance to people who are looking for the perfect mortgage for their family. The Fair Housing Act also makes it illegal for any mortgage company to refuse to provide information on loans or impose different points, fees, or interest rates based on race, gender, family status, national origin, color, disability, or religion. 

Contact Superior Mortgage Company, Inc.

Superior Mortgage Company, Inc., specializes in residential and commercial loans. We provide a wide range of products and services as well as the best products and services available. Regardless of whether you want to purchase a first home, vacation home, or commercial property, we can help. If you are interested in refinancing your home or need a Home Equity Line of Credit (HELOC), we can help. Even if your credit is not where you want it to be, contact the mortgage company to obtain the information you need to make the best decision. Call us at 845-883-8200 or email sales@superiormci.com. We look forward to hearing from you.

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