Monday, 31 October 2016
Being a Self-Employed Borrower Doesn't Have to Be Scary
Today I've asked Todd Wiggins of First Community Mortgage to address the special circumstances that self-employed borrowers should consider as they begin the process of getting qualified for a mortgage loan.
Homebuyers requiring financing are asked to provide extensive documentation regarding their employment, income, and assets. Ever since the "Mortgage Meltdown" occurred from 2007-2009, the mortgage industry has been looking at these documents more thoroughly and critically. A loan officer today will often compare his or her job to that of a private detective.
In most cases, a homebuyer's income and assets are easily calculated and documented, however self-employed borrowers are faced with additional scrutiny that can often result in a lower "qualifying income" than these borrowers might expect.
The sub-prime mortgage era presented alternatives for self-employed buyers. There were "Stated Income," "No-Doc," "No Income-No Asset" and other variations that allowed buyers to avoid the more strict conventional underwriting guidelines that applied to self-employed borrowers. We're just now starting to see some alternatives returning to the market, but today borrowers are asked to put down more money and pay a higher rate whereas in the sub-prime era there was very little premium added for these special loan products.
Borrowers are considered self-employed if they own 25% or more interest in a business or if they are 1099 employees who file a Schedule C. Self-employed borrowers are required to have a minimum of two years consecutive self-employment in the same business and geographic area.
Typically, two years of income tax returns are required for analysis, however automated underwriting findings may allow for review of just one year's returns.
Business income is averaged over a two-year period using Federal Tax Returns. In the case of declining income, significant compensating factors must exist to consider the income in the qualifying ratios. A significant decline in income is not acceptable, even if the current income and debt ratios meet agency guidelines.
The type of business (sole proprietorship, partnership, or corporation) determines how the income is calculated. The qualifying income will be much closer to the Net Income than it will be to the gross earnings, in most instances. This is where self-employed buyers can find themselves with less buying power than expected.
The one "tip" I could offer self-employed borrowers is that they should be conscious of the impact aggressive business deductions and tax write-offs can have on their qualifying income when it comes time to buy. While that may result in higher income taxes, it could also result in qualifying for their dream home.
And, of course, it is always best to get pre-qualified with a reputable lender before beginning your home search.
I'd be happy to help you with your mortgage needs.
First Community Mortgage
750 Old Hickory Blvd, Bldg One, Ste 262
Brentwood, TN 37027
Image courtesy of stockimages at FreeDigitalPhotos.net
Posted on 10/31/2016 2:21 PM by Jarod
Wednesday, 26 October 2016
Do Your Research to Find the Perfect Neighborhood
If you have the luxury of time before you make a home purchase, I highly suggest that you use that time to research the neighborhoods that you think would make a great fit for you and your family. This will allow you to narrow down your search area when it comes time to get serious about buying, and it will instill confidence in your purchase decision as well.
The holidays are a fun time to drive around and look at lights and other decorations anyway, so make those trips out multi-purpose by observing the comings and goings in your favorite neighborhoods. This time of year will also give you a head's up if there is a real-life Clark Griswold situation going on during the holidays on your favorite street! Excessive decorations might be an annoyance for some, but for others, you might get a kick out of having a neighbor with that much holiday spirit, especially if you have kids.
Here are some other important ways you can do the best research:
- Drive and/or walk the neighborhood. Do this at different times of the day to get a feel for the people, traffic, and other activities. Are people out and about, or do they keep to themselves? Do the streets get backed up during rush hours?
- Drive/ride your would-be commute. Pick a morning and afternoon to take your route to and from work from the prospective neighborhood. Is this something you can live with day-to-day or would it add a lot of extra stress to your life?
- Talk to the neighbors. Ask about local parks, restaurants, and other areas of interest. Ask them their opinions of the neighborhood. Is there an HOA? If so, what are the costs, pros and cons?
- Research the zoned schools. Even if you don't have children, this could be an important factor if you should ever try to sell this house in the future. Homes sell better in great school districts. If you do have kids, talk to other families with kids in those schools or go on a tour of the school. For a score report in the state of Tennessee, click here.
Also, the following suggestions allow you to use your senses to get a complete picture of the prospective community:
- Remember your first impression. What do you notice first about the neighborhood? Do the streets have curb appeal? Are the houses well-maintained? Do the shops and restaurants look hip and inviting? You'll want to feel good about where you call home and impress buyers when you're ready to move on.
- Look for warning signs. Be on the lookout for signs that the neighborhood is in trouble. Do you see abandoned buildings or vandalism? Are there a lot of "For Sale" signs or rentals? If the community goes downhill, so does your house's value.
- Stop and listen. Bird and nature sounds are generally pleasant, but what about noise from the highway, airport, hospital, train tracks or nearby clubs and bars? It's not very relaxing to listen to trains screech by during your morning coffee-especially not every morning.
There are many great neighborhoods in the Middle Tennessee area.
Contact me and I'll help you find the right fit for you and your family!
Posted on 10/26/2016 7:36 AM by Jarod
Wednesday, 12 October 2016
The Value of Buying Resale vs New
Many times people assume that new construction is always a better choice when it comes to finding the perfect home, but in reality, existing homes in established neighborhoods are a great investment in many ways. Here are my top reasons for buying a resale:
1. Consistent Home Value
Homes in established neighborhoods have a value history that can be tracked, so you can find out before you buy if it looks like homes in your favorite neighborhood retain their value or even go up over time.
2. Mature Landscaping
There's just something cozy and inviting about moving into a home that already has trees big enough for excellent shade and other landscaping features that create warmth and color. Also, older homes typically have much bigger yards in this area of Middle Tennessee.
3. Great Locations
If you work in downtown Nashville and a quick commute is a must, urban sprawl has pushed most new construction further and further out of the city limits. Established neighborhoods tend to be in closer proximity to downtown landmarks.
4. Architectural Character
Established homes not only carry a lot of history with them from previous owners, they also carry architectural details that are difficult to find in new homes. And if there's something that you just can't live with, typically upgrades such as countertops can be shopped for at a better price instead of at the set price that comes with new construction.
There's something to be said about your overall happiness in your home if you love your neighborhood. Some neighborhoods in Williamson County have higher overall values in their homes simply because people want to be a part of an active community that supports the local schools, sports, and other activities. Visit the neighborhood and get a feel for it. Ask around and see what people are saying. Visit neighborhood Web sites to see about amenities and events. Basically, you can know what you're getting into before you buy.
Unless you're dealing with a foreclosure, buying a resale is usually a much quicker, seamless process. If your previous home is sold, then you should be able to move in with ease instead of having to find an in-between living situation while you wait for new construction.
There are so many great neighborhoods in the Brentwood, Franklin, Nashville Tenn., area, and newer isn't always better. Give me a call and let's discuss what will best meet your wants and needs for the perfect home!
Jarod Tanksley/Brentview Realty
Posted on 10/12/2016 12:01 PM by Jarod
Saturday, 8 October 2016
2016 Fall Guide for Middle Tennessee
I love the way fall swoops in and helps us forget the oppressive heat of summer. The cooler breezes carry with them the sights, sounds, and smells of one of the best times of year to get outside and enjoy all that nature has to offer. Here are just a few favorite things to do around Middle Tennessee, besides cheering on your favorite football games, of course!
BOO AT THE ZOO
OCT. 14th-16th; 21st-23rd; and 27th-30th from 5 9 p.m
$12 Members; $15 Non-members
This Halloween tradition at the Nashville Zoo includes trick-or-treating, carousel rides, hayrides, and more. Recommended for kids 12 and under. Click here for more details.
33rd ANNUAL PUMPKINFESTâ€¨, Main Street, Franklin, Tenn.
OCT. 29th, Open 10 a.m. 6â€¨p.m.
One of Franklin's most popular events, this street festival takes over historic downtown Franklin with arts and crafts booths, games and inflatables, live music, delicious food, and a costume contest for kids and pets. Click here for more details.
NashvilleLife.com Fall Activities Guide
This site will keep you Web surfing for a while as you search through an extensive list of things to do around Nashville. Click here for their fall guide.
Now Playing Nashville
And this list includes fall festivals, art shows, and many other happenings all over Middle Tennessee.
1974 New Highway 96, Franklin, Tenn.â€¨
A Franklin fall tradition, historic Gentry's Farm opens wide its gates every fall for fun and education. Come enjoy corn and hay mazes, hayrides, tire swings, playgrounds, and then pick your own pumpkin from the patch. There are also great fall displays for family pictures. The weekend season runs October 1st October 31st and the farm will be open Monday mornings from 9 a.m. noon October 3th through the 31st.
â€¨â€¨â€¨LUCKY LADD FARMS
4374 Rocky Glade Road, Eagleville, Tenn.
Located between Franklin and Murfreesboro, Lucky Ladd Farms is open every Wednesday through Sunday in October so that you can experience their expansive list of activities. With mazes, playgrounds, pony rides, hayrides, a pumpkin patch, a tractor train, interactive educational field trips, flashlight corn maze adventures, and more.
WALDEN PUMPKIN FARMâ€¨
8653 Rocky Fork Road, Smyrna, Tenn.â€¨
This family farm is open free to the public every day but Wednesday through October 31st, but you'll want to pull out your wallets for the yummy concessions, hay and corn mazes, hayride, pumpkin train, 40 ft. slide and more!
Posted on 10/08/2016 9:46 AM by Jarod