June 2014 - Page 2 of 2 - Shoreline Mortgage

Small Business Owner? Here’s What You Need To Know About Mortgages

Small Business Owner? Here’s What You Need To Know About Mortgages If you are an entrepreneur or a small business owner, you probably know that there are a lot of advantages to this lifestyle – the freedom, the exciting challenges, the opportunities and the ability to make a living doing what you love.

However, you also know that being a small business owner can make some things more challenging – such as apply for a mortgage for your home.

Many small business owners find it tough to get approved for a mortgage, because their income can be erratic and the banks want to see proof of consistent earnings over a significant period of time.

However, it is possible to qualify for a loan as a small business owner. Here are some important things that you need to know about the process:

Ask Your Mortgage Lender What They Look For

If you ask your mortgage lender, they will probably offer you a checklist for putting together all the information needed in your mortgage package. It should have instructions on what specific documents you need to include if you are self-employed.

Filling Out The Right Forms

When applying for the loan, you will need to fill out IRS Form 4506-T, which is a Request for Transcript of Tax Return. This is basically a form that will allow the lender to look at your tax returns from the IRS, which shows proof of your earnings.

You are not able to show lenders copies of your tax returns. They must get them directly from the IRS themselves.

Submitting A Profit And Loss Statement

It can also help to ask your accountant to prepare a Profit and Loss Statement, which highlights the amount of money that you have brought in compared to the expenses of setting up your business.

If you present several of these on a quarterly basis, it will prove to the bank that your business is growing and is profitable enough to cover your mortgage.

The important thing to remember is not to give up on the idea of owning a home just because you are a small business owner. Ask your accountant for help and take the time to submit the right proof of earnings, so that you get the mortgage for your dream home.

What’s Ahead For Mortgage Rates This Week – June 2, 2014

What's Ahead For Mortgage Rates This Week – June 1, 2014 Last week’s economic news was fairly quiet due to the Memorial Day holiday on Monday and no scheduled news released on Wednesday.

Home Prices Post Modest Gains, But Growth Rate of Home Prices Slows

Tuesday’s release of the S&P Case-Shiller Home Price Index for March showed that home prices are edging up, but at a slower pace than last year. Home prices increased by 12.40 percent year-over-year as compared to February’s reading of 12.90 percent year-over-year.

Analysts expected prices to fall as construction picks up and more homes are listed for sale. Lower demand due to strict mortgage lending standards and high home prices continued to keep many moderate-income and first-time home buyers on the sidelines.

FHFA Reports Home Prices Increased By Over 6 Percent

FHFA, the agency that oversees Fannie Mae and Freddie Mac also released its home price index for properties connected with Fannie Mae or Freddie Mac owned or guaranteed loans. As of March, FHFA reported that home prices increased by 6.50 percent year-over-year as compared to February’s year-over-year reading of 6.90 percent.

Consumer confidence rose by 1.30 percent for May with a reading of 83.0, which matched expectations.

Last Thursday’s news included the weekly Jobless Claims report, which showed 22,000 fewer jobless claims than expected with a reading of 300,000 new jobless claims reported. Thursday’s reading was also lower than the prior reporting period’s reading of 327,000 new jobless claims filed.

The four-week rolling average of jobless claims also showed improvement with 11,250 fewer claims filed and an average reading of 311,500 new weekly jobless claims filed. This was the lowest number of jobless claims filed since August 2007. Analysts look to the four-week rolling average as more accurate than the weekly readings, which can be volatile.

U.S. jobs have increased by 200,000 jobs per month over the last three months reported.

Pending Home Sales Up for Second Consecutive Month

Pending home sales in April rose by 0.40 percent from the March reading of 97.4 to 97.8. The April reading was the highest for pending home sales since November. Pending home sales provide an estimate of future home sales.

Lower mortgage rates likely supported expanded home sales. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage was 4.12 percent, a drop of two basis points from last week. The rate for a 15-year fixed rate mortgage fell by four basis points to 3.21 percent.

The average rate for a 5/1 adjustable rate mortgage was unchanged at 2.96 percent. Discount points were unchanged at 0.60 for a 30-year fixed rate mortgage and 0.50 percent for a 15 year mortgage. Discount points dropped from 0.40 to 0.30 percent for a 5/1 adjustable rate mortgage.

What’s Ahead

In addition to construction spending for April, this week’s economic news includes several reports that can provide insight about employment and consumer spending.

News events include Motor Vehicle Sales for May, The Fed’s Beige Book report, and Thursday’s usual release of Freddie Mac’s average mortgage rates and weekly Jobless Claims. Non-farm Payrolls and the national unemployment rate for May are also scheduled for release

Monthly Archives: June 2014

Small Business Owner? Here’s What You Need To Know About Mortgages

What’s Ahead For Mortgage Rates This Week – June 2, 2014