Buying a Home When You’re Self-Employed

While being an independent contractor, freelancer or entrepreneur can certainly be a freeing career choice, it also comes with some challenges. For instance, it can make getting a mortgage loan harder.

Without W-2s, a consistent salary and an employer to back you up, it’s harder to prove your income as a self-employed professional — let alone show you’re not a risk as a borrower.

Are you planning to buy a home or refinance while self-employed? These five tips could improve your chances of approval:

  1. Get your finances in order. You’ll need to prove your income through bank statements, invoices, profit-and-loss statements and balance sheets. Be sure they’re ready and organized before applying for your loan.

  2. Reduce your tax write-offs. Maxing out your deductions can seem smart, but when a home loan is on the line, it can actually hurt you. The more write-offs you take, the lower your income looks, meaning you seem like a riskier bet.

  3. Boost your credit score. Higher credit scores are always more appealing when it comes to getting a loan, so take time to improve yours. Pay down debts, settle any overdue accounts and ensure your credit report is accurate.

  4. Bring in a co-borrower. When you add a second borrower to the loan, their income is factored in, too. Make sure you choose a co-borrower with good credit, a low debt-to-income ratio and steady pay.

  5. Keep your work consistent. Don’t switch industries just before applying for your loan. It’s best if you’re in the same line of work for at least two years.

Getting a mortgage while self-employed certainly has its challenges, but it’s not impossible by any means. Reach out today for more home financing guidance.

Why use a local mortgage professional?

If you’re thinking about buying pretty much anything today, it’s second nature to start looking online. But purchasing a home isn’t like buying a new pair of shoes. If you want to find the best deals and services, it’s time to put down your smartphone.

When you’re ready to work with a mortgage professional, you should work with a local advocate who will take the time to get to know you and understand your interests. Here’s why it pays to take your search offline:

  1. Better Service: Working with someone locally means partnering with someone who knows the ins and outs of homebuying in your area. They can also better gauge your situation and offer you the best loan options for your unique financial situation. On the other hand, an “instant quote” online may not take the more subtle aspects of your finances into consideration; they simply match you with “cookie-cutter” plans that are notorious for offering worse terms and higher interest rates.

  2. More Stability: Online services are often less stable than local, brick-and-mortar ones. The former are usually newer and less established, which makes it more likely for them to go out of business — causing you more hassle in the long run.

  3. Personalized Attention: When you enter your information into a standard lender comparison tool, you’ll get quotes from those in their database, but that may leave out great lenders in your area. Instead of sharing your information with many people you don’t know (and receiving endless marketing calls as a result), in-person consultations will maintain your privacy and ensure that you get a quality face-to-face interaction.

Are you planning on buying a new home? Or are you ready to refinance your current place? Reach out today.

Which problems might be deal breakers?

You’ve been to so many open houses that you’re starting to feel like a real estate expert. But it paid off! You finally found your dream home and made an offer.

But the time for making big decisions isn’t over. One question you probably have is: Do I really need to pay to get an inspection?

While an inspection is not always an absolute requirement, you should get one to rule out any major issues. Not all problems are deal breakers — you’ll likely just overlook that unpainted deck or loose doorknob.

Of course, some more severe issues may crop up during the home inspection:

  • Electricity and wiring troubles can be dangerous if the electrical system is outdated. But they’re merely an inconvenience in some cases. For example, some older systems can’t accommodate the power demands of modern appliances.

  • Foundational issues are hugely problematic and can run up quite a tab. Plus a home’s age doesn’t always factor into whether or not it has a faulty foundation. If the owner refuses to fix cracks (especially horizontal ones), it may be best to walk away.

  • Problems with doors can indicate greater issues, like overexposure to water. Structural complications can also lead to defective doors.

  • Exterior caulking that has deteriorated can lead to water damage, mold and greater long-term defects in your home.

So what can you do to protect yourself from a house with these issues?
The short answer is “inspection contingency.” Make sure you have one in your contract when you make your offer — before the inspection takes place. You could make the sale contingent upon negotiating repairs or price with the seller if the inspection reveals major issues. It also gives you the ability to walk away if a deal can’t be negotiated.

Each situation will be different, and it will depend on the home, the seller and your preferences.

Have questions about financing your home purchase? Get in touch today.

Home Projects With the Highest Returns

If you’re spending time and money to renovate your house, choosing which projects are worth it should be a top priority. You want to recoup some of your costs, don’t you?

Many upgrades could improve a property’s aesthetics or make it a better fit for your family. But not all projects will increase your home’s value — and those choices might affect how much your home sells for later on.

If you’re looking for remodeling projects that will get you a return on your investment, you may want to focus on these:

  • Stone Veneer Exterior: This is the highest-ROI project you can take on. The average homeowner recoups nearly 96% of the total cost. Plus, it does wonders for your curb appeal.

  • Wooden Deck: Want a great way to get more use out of your yard? This is the perfect place to start. A wood deck could add over $10,000 to your resale value.

  • Metal Roofing: Replacing your shingled roof with metal may net you about 61% of your project cost back and add more than $24,000 to your home’s resale value. As a bonus, it could help lower your energy bill.

  • New Garage Door: Upgrade your standard old garage door for a nicer model, like a wood or paneled one. In return, you might get a whopping 94.5% of your costs back — and improve your curb appeal to boot.

  • Major Kitchen Remodel: Any amount of kitchen remodeling is good for your home’s value. But a major overhaul can add more than $40,000 to your future sales price.

Need help covering the costs of your next home improvement project? Get in touch to learn about refinancing, home equity loans and other options.

Is it time to look for a new home?

A lot has changed since the beginning of the year. Big events went virtual, social interactions have been limited and many of us have spent much more time in the house than we ever could have imagined.

These changes might even have you eyeing a new home purchase — either for financial reasons or to better suit the new normal.

Are you questioning whether your current home still meets your needs? Here are just a few reasons you might consider a new place:

  • You need more (or less) space. If you have college-age kids or elderly parents staying with you, you may have felt cramped at home in recent weeks. Or have you noticed that entire rooms go unused for months? It may be time to upgrade or downsize if your needs have changed.

  • Your work-from-home arrangement will continue. Are you going to work remotely for the foreseeable future? The kitchen table may cut it for now, but eventually you’ll probably need a dedicated home office — something to consider if you’re house hunting.

  • You’re spending more time outdoors. Maybe you find yourself craving the sunshine a little more than usual lately. If so, you might want to look at properties with a bigger yard, a patio, a pool or other outdoor amenities.

  • You want more convenience. Want to minimize the effort of running your household? Investing in a smart home might be a wise move. Hands-free faucets, smart thermostats and locks controlled with an app are just a few of the conveniences you might find.

If any of these apply to you, get in touch so you can get preapproved and start your next home search.

New Recipes to Keep Meals Interesting

If you’ve found yourself with more time on your hands, you might be looking to try some new recipes. And as a plus, cooking and baking allow you to take advantage of all your home’s kitchen has to offer.

Don’t think of yourself as a home chef just yet? That’s okay — there are recipes for every skill level, and you can even be a little creative with ingredients for many of them.

So, if you’re looking to try a range of breakfast, lunch, dinner and dessert foods, look no further.

For Breakfast:

  • Want a healthy option, but have limited ingredients? This list features breakfast ideas that only use five ingredients each. Banana breakfast bars, anyone?
  • Maybe you have oatmeal but you’re afraid you’ll get sick of eating it day after day. With this collection of recipes, use oats for sweet or savory meals, like no-bread French toast or oatmeal with poached eggs and goat cheese.
  • No eggs? No problem. These breakfasts rely (mostly) on long-lasting pantry staples — plus, most of them will keep in the fridge or freezer. Try the farinata or chia pudding.

For Lunch or Dinner:

  • How full were the shelves last time you went to the grocery store? If your answer is “not very,” then these easy recipes will be right up your alley. From root beer pulled pork to black bean tostadas, there’s something for everyone.
  • If you’re looking for more ways to use what’s in your pantry, this list will come in handy. These inexpensive meals include sweet chili chicken stir-fry bowls and rosemary garlic white bean soup.
  • Your fridge, freezer and pantry are well-stocked, but you still don’t know what you want to make. Maybe you’d enjoy some toasted garlic-butter shrimp or roasted broccoli pesto pasta. If not, check out the rest of the recipes that made this list.

For Dessert:

  • The easier the better, right? This list of quick dessert recipes will have you treating yourself in no time, whether you’re making peanut butter cookies, pumpkin cannoli or another option.
  • Dessert should be comforting. Why not try to make some slow-cooker cherry cobbler or a mug brownie from this list of recipes that will warm you up?
  • If you’re ready to show off your skills on social media, what better way to do it than with some puff pastries? Cream cheese fruit danishes and almond croissants look — and taste — great.

Could refinancing save you money?

If you’re a homeowner, you might think that all the recent talk of low mortgage rates doesn’t affect you. But that isn’t true — they may be your key to savings.

Even if you had a sizable down payment or received a competitive interest rate at the time, refinancing your home now could mean saving thousands over the life of your loan. Ask yourself these four questions before making up your mind:

  1. Have your finances improved? If you have a better financial profile now than when you bought your home, you may be able to make a larger monthly payment with a lower interest rate, speeding up your mortgage repayment. If your credit score has improved or you have a higher income, this applies to you.

  2. How much have interest rates dropped? Mortgage rates fluctuate with changes in the economy. You may be able to obtain a more cost-effective mortgage today than when you first purchased the property, even if rates have only dropped by a percentage point.

  3. How much will refinancing cost? The process will likely cost you a percentage of the amount you borrow. Remember the application and appraisal fees when you bought your home? They apply here too. Another thing to consider: If your home interest payment is a tax deduction, a decrease in your interest amount could lower that deduction.

  4. How much longer will you be in the home? If you’re not planning to stay in your current home very long, and therefore won’t need to pay off the mortgage, refinancing shouldn’t be your top priority. Spending the time and money on that process won’t pay off like it would if you stay in your home for another 10 years or more.

Are you ready to refinance? Do you have specific questions about your situation? Reach out today.

How has the appraisal process changed?

If you’re looking to buy a home this season — or thinking about refinancing — you may be wondering how things have changed in recent months.

Many routine activities, including parts of the home financing process, look a little different now due to social distancing and other safety guidelines.

Getting an appraisal is one such step that you may be curious about. Whether you’re moving up, downsizing or refinancing, we have answers to your home appraisal questions and more:

Q: What is an appraisal?
A: Typically, it’s a process in which a licensed professional comes to the home to look at it and learn as much as they can. Then, they compare it to nearby homes that have recently sold. The appraiser’s job is to gauge the home’s value based on the property and data from the community.

Q: How are they being conducted right now?
A: Many appraisers are doing desktop and drive-by appraisals. The former means that they’re doing research based on local data, comparable sales and other recent appraisals. The latter involves the appraiser literally driving by the home to look at its exterior and the surrounding neighborhood. In both cases, they might also ask for videos and photos of the home’s interior if they’re unable to visit it themselves.

Q: When should I get an appraisal?
A: The process of verifying a home’s value begins after you sign a contract to purchase or refinance it. The appraisal will generally be scheduled for you. It would normally happen within the first few days after all parties agree to the terms of the home’s purchase, but it may be postponed in some cases, due to social distancing guidelines.

Q: How much does it cost?
A: The cost depends on various factors, including the property size and the type of home. Most often, they’re a few hundred dollars, which is typically wrapped up into closing costs.

Please reach out if you have more questions about any part of the homebuying process.

Approved Mortgage Donates Meals to Front Line Workers at Hospital

The COVID-19 pandemic has hit small business, healthcare workers, and first responders hard. Supporting the local essential front line workers and small businesses is so important right now. 

Approved Mortgage partnered with Absolute Lending Logistics and recently purchased meals from a local restaurant that were used to feed over a hundred of the front line workers at a local hospital. 

“Our goal was to come up with a creative way to feed essential front line healthcare workers at a local hospital while also driving additional business to a local restaurant,” said Derrick Christy, CEO of Approved Mortgage. “We also wanted to make sure that we were able to do so in a safe and controlled way to ensure everyone’s health during these unprecedented times.” 

Each meal that was purchased by the mortgage company, was individually prepared and packaged by the restaurant Oaken Barrel. The individual meals were then secured and dropped off inside a safe location at Saint Francis South-Cancer Center and Hospital where a controlled pick-up was coordinated for essential front line healthcare workers. 

“We’ve been pretty fortunate that our business has been deemed as an essential business, and even though most of our team members are working from home, we are still able to operate our business as usual,” said Jim Landwerlen, President of Approved Mortgage. “So we thought we would be better able than most other business to help others in our community as long as we were able to work out the logistics.” 

The restaurant, hospital, and mortgage company collaborated together on delivering the free meals to nurses, doctors, paramedics, and other essential healthcare workers. In doing so, Approved Mortgage continues to advocate for community goodwill, especially during times of need. In addition to donating the meals, the company hosts an annual blood drive, supports the local humane society, Leadership of Johnson County, and several other local and state organizations trying to make a difference in their communities. 

About Approved Mortgage 

Approved Mortgage is the largest and oldest locally owned mortgage banker in Central Indiana with over 5 billion funded for Indiana families.   As an industry leader for over 20 years, Approved Mortgage is recognized by Zillow® as a 5-star lender, rated a Top 20 Broker by Expertise®, and ranked by Entreprenuer.com® as one of the top 25 Best Small-Company Cultures. Approved Mortgage is a direct lender with in-house underwriting that allows for same day approvals.  We provide a vast array of residential mortgage loans that has served thousands of families making their dream of home ownership a reality. Our residential product line includes conventional, jumbo, FHA, VA, reverse mortgages and portfolio loans for purchase, refinance, and construction transactions. We also offer a variety of commercial real estate loans for multifamily, office, retail, warehouse/flex space, as well as business loans including SBA, lines of credit, credit card merchant services accounts, and factoring.  We look forward to assisting you with your mortgage loan needs by delivering just the right product you need and with the service you deserve. Approved Mortgage has served thousands of satisfied clients and is an A+ accredited member of the Better Business Bureau.