Mortgage Do's And Don'ts
Mortgages can be tricky, and it's easy to make mistakes that can end up costing you dearly. That's why we've put together this list of Mortgage Do's and Do not's to help you navigate the process with ease - and a little bit of humor.
DO: Shop around for the best mortgage rates
DON'T: Assume your bank will give you the best rate just because you have a checking account there. Remember, loyalty is a two-way street.
DO: Have a budget in mind
DON'T: Get in over your head. Just because you can technically afford a million-dollar mansion doesn't mean you should buy one. You don't want to be house-poor and unable to afford groceries.
DO: Get pre-approved before house-hunting
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DON'T: Assume you'll be approved for a mortgage just because you have good credit. Pre-approval is important because it gives you a better idea of how much house you can afford and shows sellers that you're serious.
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DO: Consider your future plans
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DON'T: Assume you'll live in your new house forever. Life happens, and you may need to sell sooner than you think. Make sure you're not getting into a mortgage that you can't realistically afford if you need to move in a few years.
DO: Get pre-approved before house-hunting
.
DON'T: Assume you'll be approved for a mortgage just because you have good credit. Pre-approval is important because it gives you a better idea of how much house you can afford and shows sellers that you're serious.
.
DO: Consider your future plans
.
DON'T: Assume you'll live in your new house forever. Life happens, and you may need to sell sooner than you think. Make sure you're not getting into a mortgage that you can't realistically afford if you need to move in a few years.
DO: Read the fine print
.
DON'T: Sign on the dotted line without reading the terms and conditions. There may be hidden fees or clauses that could come back to haunt you later.
.
DO: Be prepared for unexpected expenses
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DON'T: Assume everything will go smoothly. There may be unforeseen expenses, like a leaky roof or a broken furnace, that can quickly drain your savings. Be sure to budget for these types of surprises.
DO: Read the fine print
.
DON'T: Sign on the dotted line without reading the terms and conditions. There may be hidden fees or clauses that could come back to haunt you later.
.
DO: Be prepared for unexpected expenses
.
DON'T: Assume everything will go smoothly. There may be unforeseen expenses, like a leaky roof or a broken furnace, that can quickly drain your savings. Be sure to budget for these types of surprises.
DO: Have a good sense of humor
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DON'T: Take everything too seriously. Yes, buying a house and getting a mortgage can be stressful, but try to find the humor in the situation. After all, laughter is the best medicine for a stressful day.
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By following these Mortgage Do's and Do not's, you'll be well on your way to successfully navigating the mortgage process - with a smile on your face. Good luck, and happy house hunting!
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💼 W-2 vs. 1099 Income: How It Impacts Your Mortgage Approval 🏡
💼 W-2 vs. 1099 Income: How It Impacts Your Mortgage Approval 🏡
📊 Self-Employed or Salaried? What Lenders Look for in Your Income 💸
💼 W-2 vs. 1099 Income: How It Affects Your Home Loan
When it comes to buying a home, how you earn your income matters—a lot. Whether you're a salaried W-2 employee or a self-employed 1099 contractor can drastically change the mortgage process and the documentation you'll need.
✅ W-2 Income: The Lender’s Favorite
W-2 income is often seen as more stable and predictable, which makes it easier to verify. Lenders typically only need:
· Your last two years of W-2s
· 30 days of pay stubs
· Recent bank statements
If your employment is consistent, you’re usually approved quicker with fewer hurdles.
⚠️ 1099 Income: More Paperwork, More Scrutiny
Self-employed borrowers or independent contractors are usually paid with 1099s. That means lenders will ask for:
· 2 years of personal and business tax returns
· Profit & loss statements
· Business bank statements
· Possibly a CPA letter
Lenders want to see that your income is consistent and sustainable over time. This can lead to more documentation and a longer underwriting process.
🏡 Can You Still Qualify with 1099 Income?
Absolutely. In fact, many lenders (including us at Medallion Mortgage) offer bank statement loans or non-QM products that cater specifically to 1099 workers. These programs allow you to qualify without tax returns, focusing instead on your cash flow.
🧮 Key Differences at a Glance:
Criteria
W-2 Borrowers
1099 Borrowers
Docs Required
W-2s + Pay Stubs
Tax Returns + P&L + Bank Statements
Approval Time
Faster
Longer
Income Scrutiny
Minimal
High
Program Options
Conventional, FHA, VA
Bank Statement, DSCR, Non-QM
🧠 Final Thought:
Whether you’re clocking in or running your own business, you can buy a home. You just need the right mortgage strategy—and the right broker to guide you.
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© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
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