Self-employed borrowers have always had to jump through a few hoops to finance or
refinance their homes. Without a traditional paycheck, lenders look for other ways to
document income. The COVID-19 pandemic has affected many business owners and delayed
tax return filings. As a result, Fannie Mae and Freddie Mac have enacted changes in the way
the mortgage industry processes home loan applications (as of June 11, 2020).
Self-employed borrowers are typically verified by the most recent two years of income taxfilings. As a result of the pandemic, those two years might not give a current or accurate
picture of the borrower’s income. As the borrower is seeking to secure a loan before the next
filing period, underwriters are now requiring a signed Profit and Loss Statement (P&L) from
Profit and Loss Statements
As part of the underwriting process, self-employed applicants must provide an audited or self generated P&L statement for the current 2020 period. The statement must not be older than
60 days and must include:
• Net Income
• Business Depository Account Statements (two most recent)
• Business Revenue
In addition, the borrower must provide their most recent personal bank statements which
should support the P&L statement.
Self-employed loan applicants have always faced challenges when seeking a home loan. Now
more than ever, it’s important to understand the requirements and work with a mortgage
professional to ensure the loan application is packaged correctly with all the needed
documentation. Lenders are still approving home loans, but with these changes put in place to
minimize risk as the mortgage industry works through the challenges of this pandemic.
The original purpose of a mudroom was to ensure that the dirt and grime of the
outdoors never made it inside your home, where visitors could see it. Believe it or
not, the modern mudroom is often the first thing your guests see, as more formal
entries are shunned in favor of the casual entrance to the house. As a result,
these functional rooms are now gaining the attention of homeowners and
If your mudroom could use some sprucing up, here are 4 ways to instantly
upgrade your space.
1. Change the Entrance – Changing out that old dull door for a fresh style can
instantly change the mood of the room. Adding windows to bring in natural
light makes the space warm and inviting.
2. Fresh Paint – Almost every article about updating your home’s look includes
new paint for a reason; paint instantly changes the look and feel of a space.
Merging bright colors with clean white accents creates visual interest and
provides a perfect segue to the rest of the house.
3. Update Your Fixtures – From lighting to doorknobs and hooks, upgrade your
functional fixtures with contemporary styles. Double check that the room
has adequate lighting which also complements your design aesthetic.
4. Rethink the Storage – Does your mudroom have adequate storage for your
needs? A storage bench is a great addition which adds extra space, as well
as a place to sit while you remove your bulky items.
Mudrooms are often dirty, damp repositories for the mess which isn’t appropriate
for the main house, but there is no reason it can’t be functional and beautiful. By
making a few simple changes, you can transform your mudroom and welcome
your family and visitors through a fresh space.
There are so many questions and concerns amid the Covid-19 coronavirus
outbreak. The real estate market is especially hard hit and sellers are concerned.
Real estate at its core is a people business. It relies on person-to-person
interaction and the coronavirus necessarily limits this contact. As the spring
selling season gets started, home sellers will have questions and it’s important to
acknowledge concerns and offer practical advice and concrete information to
help sellers make the best decision for themselves and their families.
1. Should I still try and sell my home? – Of course, there are many aspects to
this question. First and foremost, the health concerns of the sellers’ family
have to be taken into consideration. Unless absolutely necessary, the
elderly and those with underlying health issues should not allow
unnecessary people into their homes; including buyers and agents.
If the household is essentially healthy and not considered high-risk, then
this could be a great time to sell. Consider the advantages of lower
inventory coupled with low-interest rates; as listings become rarer, the
remaining inventory will get more attention which could create better
2. Is it safe to have people through my home? – This is certainly a concern,
but there are practical steps you can take to ensure safer home showings.
3. What can I do to protect my family during showings? – Protect the home,
family and visitors alike by taking the following precautions.
a. Keep hand sanitizer at the front door to offer buyers and their agents
when they enter the home.
b. If there is a guest bathroom, keep disposable hand towels and soap
for guests to use and make the request known to the showing agent.
c. Offer disposable gloves for use with a receptacle for used gloves.
5 Questions Buyers Have During the Coronavirus Outbreak Answered
Everyone is being affected in some manner by the outbreak of Covid-19 coronavirus. During this
time, buyers will have more questions than normal about the home buying process and their
ability to buy a new home. While we can’t predict what the next few weeks and months will
bring, the more we can educate ourselves, the better we can help buyers navigate the buying
process smoothly during the pandemic. Here are a few common buyer questions as they related
to the Coronavirus outbreak and real estate answered.
1. Can we still go see home listings in person? – This is the hardest question to answer
and it will depend on the home, the seller, the agent and any fast-changing governmental
policies put in place. Agents should be able to offer a Skype or Face Time home tour
virtually. Talk to your agent to find out what they have available for the buyers to prescreen the home virtually before setting up the visit; they might have virtual tours already
available which can help rule out those that don’t suit their needs.
2. How can I stay safe while visiting homes? – Everyone’s health has to be the priority;
this includes the buyers, sellers, and agents. If you are going to see a home in person
during this time, carry hand sanitizer and wipes to use before, during and after the tour.
Drive separately from your agent meet at the homes. During the tour, designate one
person to open doors, drawers, and closets and use disposable gloves during the
3. What happens if I lose my job during the escrow period? –Most real estate contracts
include a contingency that protects the buyer in the event they can’t get final loan
approval and close the loan. Typically during the process, this contingency is removed
after a set time frame, or after receiving the loan approval. Since every aspect of real
estate is negotiable, consider asking for the contingency deadline to be extended and in
place until the close; talk through this aspect with the seller and their agent in advance to
set the right expectation.
4. Will I still have access to the home during the escrow period? – It’s very common for
the buyer to have easy access to the home during the escrow period; home inspections,
appraisals and just measuring are all common reasons to visit the home during escrow.
Consider grouping these activities whenever possible.
5. Will I get a better deal if I wait to buy a new home? – We all know there’s no crystal
ball, but with everything that’s going on, sellers on the market should be very motivated
to sell. There are also historically low-interest rates on home loans. There is no way to
predict the future, so if the right home comes along, it makes sense to consider it.
Finding the perfect time to buy a home is a challenge that requires research and a
bit of luck. While timing the purchase perfectly might be desirable, the truth is the
right time is a personal decision. As we enter 2020, you might be wondering if this
is the right time to buy your dream home. With a strong economy, low
unemployment and higher household income, there are 3 great reasons why you
should consider buying that dream home this year.
1. A Home is a Great Investment – Real estate remains one of the best
investments one can have. Based on hard assets, real estate tends to
weather the ups and downs long term better than other investment tools,
such as stocks or bonds.
2. Mortgage Interest Rates are Low – Interest rates have fallen over the past
year from 5% in November of 2018 and Freddie Mac expects them to level
at an average of 3.8% in 2020. This extra purchasing power is important
when buying your dream home and this is a good time to lock in that rate
for the next 30 years.
3. Hedge Against Inflation – Rental costs continue to rise and as the economy
heats up, inflation becomes more of a possibility. A fixed 30-year mortgage
freezes your housing costs and works as a buffer from inflation which is
impacting the rental market.
Owning property is almost always a good investment. If you’ve been thinking
about exchanging your current home for your dream house, 2020 could offer the
right time to move up.
Words I hate to say!!!
“I’m so sorry, they went with another offer.” It’s a shocking thing to hear; you’ve
already moved into that dream home in your mind. It’s common to start second
guessing yourself, even condemning yourself for not offering more money or
better terms, but the truth is sometimes it just doesn’t work out. The next step is
to figure out how to move on.
• Go Ahead and Mourn – It’s perfectly reasonable to mourn the loss of the
• Take a Break – This might not be as easy as it sounds if you need to move,
but even a short weekend off to regroup and refresh will allow you to
continue the search.
• Understand What Went Wrong – It may be that you did nothing wrong and
the seller got an all-cash offer 20% over asking, but it’s still a good idea to
talk with your agent about your offer, make sure you truly offered a fair
price with reasonable terms and if not, make adjustments next time.
• List What You Liked About the Home – Make a list of the features you liked
about the home – open floor plan, big yard, expansive view, etc. This will
allow you to watch for these features as you continue the search.
Losing out on your dream home is sad, but it doesn’t mean you won’t find
another home you love just as much. Take some time to think through the
experience and keep going – there are so many homes to choose from, you’ll find
another home to love.
If you are planning to list your home for sale, you probably already know that you
need to prepare your home for the market. The point is to create the most
attractive, welcoming version of your home to entice buyers into the home and
encourage offers. Your listing needs attention also! Professional photography is
the best way to attract those buyers and to ensure you get the best possible price
in the shortest timeframe.
Most buyers now start their home search online. Online listings with professional
photography receive significantly more views than those without. Buyers tend to
linger on the site longer as well.
Professional photographers do far more than snap pictures with the right lens.
They understand how to create the right emotional response in the viewers. They
have experience working with listings and homes and normally they specialize in
You already know that homes must be staged to some degree for sale. Buyers
must be able to envision themselves living in your home. Photography is about
lighting and angles. A good photographer can bring out the best in your home by
using these techniques in their shots. Professional pictures can play with light and
position to allow your home to appear spacious and bright.
Professional photography is no longer reserved for luxury property listings. More
and more agents are seeing the value of beautiful pictures. Make sure your home
stands out among the sea of listings as potential buyers sort through properties
online. Professional photography will help you sell your home faster and for a
higher sales price than those without. Present your home in the best possible light
to attract those buyers and encourage them to visit and write you an offer.
If you are a first time home buyer, or even a repeat buyer, you quickly realize that
real estate has a language all its own. Understanding some of the lingo can help
you navigate the process a little easier. By learning a few critical terms, you will be
in a better position to ask the right questions and make the best decisions.
• Buyer’s Market – A real estate climate where the amount of listings
outnumber qualified buyers.
• Seller’s Market – A real estate climate when there are very few desirable
properties listed for sale.
• Contingencies – Specific conditions included in offer to protect the buyer
against unexpected situations, such as inspection, loan approval and
• Earnest Money – Money deposited when the offer is accepted. Subject to
any contingencies, this money protects the seller from a buyer who simply
changes her mind.
• Escrow Agent – A neutral 3rd party who manages the paperwork in a state
where attorneys are not used to conclude the contract.
• Closing Costs – Fees which must be paid by both buyers to conclude the
• Conforming Loan – A conforming loan is a loan limit by which the loan can
be sold on the secondary market; a jumbo loan is one which is higher than
• PMI – PMI, private mortgage insurance is a fee paid by the borrower of a
loan that they obtained with less than a 20% down payment.
These are just a few of the common terms used in real estate. If you are involved
in a real estate transaction, learning a bit of the common lingo will help you
understand the process better and make your home sale or purchase a smooth
Now that the warm summer months are behind us, it’s time to prepare for
winter. Regardless of whether you expect to see sub-zero temperatures this
season or you live in one of the warmer climates, preparing your home for colder
weather can save you money and hassle this winter. So before you dig out your
fall sweaters, take a weekend and prepare your home for the cold weather to
Fall is a great time to seal drafts in the home which can suck energy out. Check
around doors and windows and replace worn weather stripping and caulking. If
you use your fireplace for warmth during winter, this is the right time to have the
chimney cleaned and checked for safety. Arrange a furnace tune up complete
with replacing the filter and vacuuming the vents to make sure you are warming
your home efficiently.
Before the chill turns to freezing, head to the yard to winterize the exterior of
your home. Check gutters for clogged leaves and other debris and examine the
roof and siding for any repairs which could create leaks or drafts in the cold. If the
gardening season is at its end, drain water from outdoor faucets and garden
hoses. Make sure the sprinkler system is off and reinforce any exposed pipes
which could burst with the cold.
Fall is here. Along with the smell of baking and falling leaves, you can ensure your
home is ready for winter by taking a few steps now to prepare. Save energy and
the hassle of an unexpected repair by getting some routine maintenance done
before the cold months come.
Tips to Pay off Your Loan Faster
For generations, homeowners would buy a home for life. Working over the years
to make the payments and celebrating the end of the 30 year mortgage were
great milestones in the family. Today, few home buyers expect to be in their
home for longer than 7 years on average. Paying off a 30 year mortgage seems
like an impossible task. Fortunately, there are great ways to pay off your loan
which do not involve time. Here are a few tips for paying off your mortgage loan
Biweekly Payments – Work with your lender to determine how they handle
biweekly payments. If processed immediately, you can save 8 years of
payments on a 30 year loan.
Extra Payments – By making just one extra payment each year, you can pay
off your loan 11 years earlier.
Refinance to 15 years – There are great interest rates available for
mortgage loans. Consider a 15 year mortgage.
Principal Reduction – Watch for ways to add to your monthly payment a
little at a time. When possible, increase the principal payment you make.
Paying off your mortgage builds wealth. Consider your life goals, including
retirement. A 30 year loan taken out at 37 years old will not be complete until 67
– retirement age. The loan needs to be part of the overall financial plan from the
beginning and making payoff a priority with a few simple steps can add up to
huge savings in interest which can then be used for better investments.