Buying a home is a major life decision. Not only is your home the place where you’ll spend a large amount of your time—and maybe even more time as the work-from-home trend continues—buying a home is a large financial investment.

As a result, homebuyers typically need a mortgage from a bank or other financial institution to supplement any cash they’re using for a down payment. Interest on this mortgage adds to the total of what you’re ultimately paying for the home over time.

One of the silver linings of the COVID-19 pandemic is all-time low mortgage rates. In May of 2000, 30-year fixed rate mortgages through government-sponsored lender Freddie Mac reached their most recent peak at 8.64%. Rates have declined relatively steadily over the last 20 years and have now hit all-time lows, dipping below 3% for the first time ever in July 2020.

Unfortunately, even though rates have come down since the COVID-19 pandemic set in, self-employed individuals and small business owners all over the country are now facing increased obstacles when it comes to applying for a mortgage.

What do mortgage lenders look for?

When applying for a mortgage—whether you’re self-employed or a W-2 employee—lenders want to make sure you are someone who will make consistent payments toward paying off the loan. Lenders want to ensure applicants have a good credit history, sufficient liquid assets available, a history of stable employment, and a low debt-to-income ratio.

To assess creditworthiness, mortgage lenders require borrowers to submit federal income tax returns from the last two years as well as recent pay stubs to ensure you have a steady income stream. However, because most self-employed people don’t receive pay stubs, they need to provide other documentation to prove financial stability.

What do self-employed individuals need to provide when applying for a mortgage?

Historically, most mortgage lenders required self-employed individuals to provide a two-year history of self-employment earnings to ensure that that income was stable and that the business (whether it be a sole proprietorship, partnership, or corporation) was currently operating.

Now, in the COVID-era, mortgage lenders are requiring self-employed individuals to also supply a year-to-date profit and loss statement as well as at least two recent months of business bank statements.

Can self-employed individuals qualify for mortgages?

Yes, and—like with anyone else—if you have documented proof of good credit history, available liquid assets, history of stable employment, a low debt-to-income ratio, and patience with paperwork, receiving a mortgage loan can be just as straightforward for a self-employed person.

Can 15 West Homes help you apply for a mortgage?

There are lenders that actually specialize in helping self-employed individuals get a mortgage with a competitive rate. Please reach out to us, and we’ll be happy to pass along names and contact information to you. It’s always good to talk to a couple lenders as you begin the process.

Even in the days of the novel coronavirus, we are still seeing many situations where there are multiple offers on a home. That’s certainly the case in this resilient northern Virginia market. If you’ve ever been a buyer in this situation, you know it can be confusing and stressful. Even today, it’s wise to assume your offer will not be the only one submitted, especially if it’s a well priced and nicely maintained home.  

Does that mean you don’t stand a chance? Absolutely not. If you work closely with your agent and keep these 9 strategies in mind, you’ll put yourself at an advantage over other competing offers and get noticed by the seller.

  1. Price is not always the main priority of the seller. Make sure your agent contacts the listing agent before an offer is written to find out what’s important to the seller. This should be done as a matter of course in any situation. 
  2. Make sure you are pre-approved from a good local lender. These days, sellers won’t even consider offers from buyers who are not pre-approved (pre-qualification is a lower hurdle and is not as strong). You will always be up against other buyers who are pre-approved. Don’t know where to start? Your agent is a great source of lender referrals, and this step should be taken at least several weeks before starting to look at homes. That way, when you find the home of your dreams, you’ll be ready to take action and have your offer taken seriously. 
  3. Increase the amount of your Earnest Money Deposit (EMD). This shows you are serious and want the home. Sellers know that a buyer is much less likely to walk away from a sale if they put down a significant EMD. The earnest money deposit gets credited back to you, the buyer, at closing, so there is minimal risk in putting down more. 
  4. Do not ask for closing cost assistance. Asking the seller to take money out of their pocket is not a tactic to employ in multiple offer situations. The less money out of their pocket the better. To them, it equates to reducing the price of the home.
  5. Consider an escalation clause to mitigate offering too much. That way, you can offer more, but only in increments and only if necessary. Odd-value increments like $1,200 or $1,500 are a good strategy as most people use $1,000 increments. You also have the option to retain the appraisal contingency so if the home does not appraise for what you offered, you have options — including voiding the contract.
  6. Shorten timelines on any contingency. Work with your lender and agent to minimize the time it takes to get financing approval, the appraisal and any inspections — while still protecting you as a buyer. 
  7. Be flexible regarding the closing date. If you have flexibility, offer to work around the seller’s preference for a closing timeline. IF that’s important to the seller.  
  8. Give the seller money. Yes, you heard it right, offer to pay some of their closing costs (like taxes or settlement fees). It’s a creative way to get your offer to stand out.
  9. “Love letters” to the seller are also an option. Let the seller know how much you love their home and what they have done with it. Make it as personal as possible — a handwritten note is definitely the way to go if there is time. If not, send a PDF of the letter. Try to find commonality or connection with the seller…did something in particular really stand out to you when you walked through the home? Did your agent uncover some relevant information when talking to the listing agent that might put your offer at an advantage? If so, use it. Make sure there are no spelling or grammar errors in your note, and close with gratitude and thanks.

42077 Trengwinton Place, Leesburg, VA

OPEN HOUSE Sun, 12:00PM to 4:00PM

$ Click for current price
5 BEDROOMS | 5 Baths (4 full, 1 half ) BATHROOMS | 4718 SqFt

SIMPLY GORGEOUS, move-in ready Stanley Martin Carey Model home in Historic Selma Estates. Sellers have done all the right upgrades to your new home including hardwood throughout the main floor and upper floor landing, new, on trend lighting fixtures, new paint and new landscaping (oh, and the grass is ah-mazing) on over ONE-HALF ACRE! The main level offers a LARGE and LIGHT-FILLED open concept kitchen, dining and large, inviting family room. The GOURMET kitchen boasts TONS of cabinet space, a GIANT pantry, stainless steel appliances, a HUGE oversized island with storage, granite countertops, custom tile backsplash and updated pendant and dining lighting. The family room amazes with a rustic reclaimed wood feature wall and a slate surround gas fireplace to keep things cozy in the winter. The main level also has an office and formal dining room for entertaining. The upstairs welcomes you to a master suite FILLED WITH NATURAL LIGHT that has everything you need and then some; HIS AND HER WALK IN CLOSETS, a sitting room and a large, luxury en suite bathroom with his and her vanities, a soaking tub and oversized shower. Three additional, spacious bedrooms are on the upper level, two with walk in closets and one with its own en suite bathroom! A large third full bath with dual sinks ensures there are plenty of bathrooms for everyone! The 4th level has a wonderful loft area that can be used as a game room, study or yoga retreat and a FIFTH BEDROOM – great for the older teen or guests! The lower level has a LARGE REC ROOM, FULL BATH and possible 6th bedroom! Don’t worry, the basement also has PLENTY of STORAGE SPACE too. The large deck off the kitchen is PERFECT for taking the party outside and looks out on OPEN CONSERVANCY LAND (that will never be built on) and PICTURESQUE MOUNTAINS. There’s also plenty of room to run around and even add an in ground pool! All of this and tucked away on a QUIET CUL-DE-SAC too! But wait, there’s more, you’re just TEN MINUTES from charming downtown Leesburg, minutes away from several wineries, breweries and other treasures of Leesburg including: White’s Ford Regional Park, Ida Lee Recreation Center, Loudoun County Rust Library, Historic Morven Park, Equestrian, Tally Ho Theatre, Leesburg Village Center including Wegmans & many Restaurants & Shops, as well as Cobb Theatre, Leesburg Premium Shopping Outlets, MANY wineries and breweries, Roots Cafe and Local Market, The Old Lucketts Store (great Antique Shopping), Farmer John’s Fruit & Vegetable Market, The Marshall House, Historic White’s Ferry, Oatlands Plantation, Temple Hall Farm Regional Park, Leesburg Animal Park and Public and Private Golf Courses. In addition, Frederick, Maryland is a short 30-minute drive, with many restaurants, shops, and historic sites. The Appalachian trail is a 30-minute drive and Shenandoah State Park is a one-hour drive with camping sites and facilities, restaurants, and walking trails. This one won’t last long, schedule your showing today!

Presented By:

Maggie Hatfield

15 West Homes at Keller Williams Dulles
Licensed In: VA
License #: 022522588923

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You’ve probably heard about how we are still in a relatively strong “seller’s market.” This is defined not just as a market in which demand for homes is greater than the current supply, but more specifically as a cycle in which the “absorption rate” of homes on the market (the time it would take for today’s total inventory of homes to sell) is less than 5 months.

But that doesn’t necessarily need to be a concern for those of you looking to buy. Rates are near historic lows, so from that perspective, the current climate is great. You’ll be able to afford more than you might if rates were higher. Plus, since there are fewer buyers looking in the winter months, you have less competition if you do find that perfect house.

How to put yourself in the best position to get your offer accepted…

But regardless of when you’re looking — either now or a few months down the road — the best advice I can give you is to first make sure to get pre-approved (not just pre-qualified) for a mortgage. That is one of the best ways to ensure you’ll be in an advantageous position when you’re ready to submit an offer on your dream home.

After all, when sellers receive multiple offers (which is very common these days), they look at more than just the amount of money being offered. They also look at whether there are any contingencies, the buyer’s desired timing for settlement/move-in, and whether a buyer is already pre-approved (and the strength and reputation of their lender). If you aren’t pre-approved, a seller won’t give your offer much, if any, thought, because they have no way of knowing if you’ll even be able to get a loan. They will invariably move on to the next offer.

Other benefits of pre-approval

Pre-approval benefits you in another way, too. You’ll know exactly how much you can afford, so you and your Realtor® can focus on the best homes within your price range…and be ready to submit a competitive offer that will get consideration.

So, if you’re thinking of beginning your home search soon, now’s the time to reach out to a couple lenders. If you already have a trusted lender you’ve worked with in the past, great! If not, we’d be more than happy to make a few recommendations. Local mortgage companies are usually your best bet, as they are easier to get in touch with and offer a higher level of personal service than bigger banks or credit unions. Many mortgage companies have sub-specialties as well, like handling Jumbo loans or loans to borrowers who are first-time homebuyers or self-employed. Some can even help borrowers with advice on cleaning up their credit so they’re in a better position to apply for a loan.

Contact us at [email protected] if you’d like some recommendations. We have many trusted lenders we can put you in touch with!