How self-employed borrowers can get the best rates
Source, OC Register, Jeff Lazerson, March 8, 2018
Rate news summary
From Freddie Mac’s weekly survey: Average rates are on the verge of breaking the 4.5 percent barrier. The 30-year fixed averaged 4.46 percent, up 3 basis points from last week and just 4 basis points shy of 4.5 percent. It’s the ninth week in a row of rising rates.
The 15-year fixed averaged 3.94 percent, up 4 basis points in a week to the highest rate in almost seven years. The 15-year also has gone up for nine straight weeks, with increases in 18 of the past 23 weeks.
The Mortgage Bankers Association reported loan application volume was unchanged from the previous week.
Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $453,100 loan, last year’s rate of 4.21 percent and payment of $2,218 was $67 less than this week’s payment of $2,285.
Locally, well-qualified borrowers can get the following fixed-rate mortgages at zero point cost: A 15-year at 3.875 percent, a 30-year at 4.375 percent, a 15-year agency high-balance ($453,101 to $679,650) at 4.125 percent, a 30-year agency high-balance at 4.625 percent, and a 30-year jumbo (over $679,650) is at 4.75 percent.
Tax season is now. So, it’s income optimization time for self-employed borrowers (anyone that owns 25 percent or more of any business). Well, at least for those applying for mortgage credit in the near future.
You don’t necessarily need to be self-employed for two years. Fannie Mae and Freddie Mac have specific parameters that may allow one-year self-employed borrowers to qualify.
Doctors are a separate category for a few jumbo investors (above Fan and Fred’s loan limits), offering financing for one year of self-employment.
Rule number one is you can’t have your cake and eat it too. That is, don’t whittle away your taxable income by under-reporting to Uncle Sam and then get mad the mortgage contact can’t qualify you for the home you are eyeing. Explain your general down payment, loan amount and monthly maximum payment parameters to your lender. Send along copies of any documentation your lender requires.
Planning ahead is the key to understanding your maximum mortgage qualifications.
| 
