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For the self-employed, applying for a mortgage can seem like an even more daunting task, especially if you can’t predict your monthly income. But although there may be a few additional hurdles to clear, the self-employed can certainly qualify for a mortgage, and the best way to do this is to be ultra-prepared. Although requirement vary depending on your lender and your loan, below is a list of documents you should be able to provide.

Tax returns for the past 2 years.

This is simple: in order to predict if you can make your payments, lenders will want to check out your income history. And without the convenience of a monthly or weekly pay stub like most W-2 employees have, lenders will turn to your tax returns to calculate an estimated average monthly income.

Profit and Loss Statement

If you own your own business, you will likely need to provide your lender with a profit and loss (P&L) statement. This shows the lender how much money your business makes and how much it spends.

A Good DTI Ratio

Your debt to income (DTI) ratio is a figure that lenders rely on when evaluating whether or not you can afford a mortgage. For w-2 employee mortgage applicants, 43% is generally the max DTI you can have and still qualify for a mortgage. For self employed borrowers, the DTI maximums will most likely need to be lower, as you’re a higher risk applicant.

A Good Credit Score

Ah, the credit score, perhaps the most important indicator of whether or not you’re applicable for a mortgage. Do you make regular, on-time payments? Do you refrain from taking out more debt than you can afford? Do you use credit consistently but not carelessly? These are all things that lenders want to know and your credit score is the easiest way to answer those questions. Obviously, the better your credit score, the more likely you are to qualify for a mortgage. Youll also be more likely to qualify for a competitive interest rate if you have a high credit score. Check your credit score for free before you begin the mortgage application process. You can do so once a year through the three TransUnion, Equifax or Experian.

Published with permission from RISMedia.

In all likelihood, your home is the biggest investment you’ll make in your life. To protect that investment, you should perform regular maintenance to ensure your home runs efficiently for years to come. Although most homeowners already know the importance of maintenance and tackle the most obvious jobs, you may be surprised to learn there are a few tasks you probably overlook.

Clean Your Refrigerator Drip Pan
Did you know that most refrigerators have drip pans? The pans need to be cleaned regularly; otherwise, they can be prone to mold growth. Pull the pan out carefully to prevent spills, dump excess liquid and clean the pan with an all-purpose cleaner.

Flush Your Water Heater
Check the temperature of your water heater to ensure it’s set below 120 degrees Fahrenheit to prevent scalding. Test its safety relief valve once a year so that it operates properly, and flush the system to remove sediment buildup, which can cause system failure.

Reseal Your Grout
Grout needs to be resealed annually to protect your tile from wear and tear. Most grout is made of sand and cement; this means it can absorb water, bacteria and even stains. Resealing will help your grout look better and last as long as possible.

Test Smoke Alarms
Testing smoke alarms and changing their batteries is a vital maintenance task for safety reasons. Smoke alarms should be tested twice a year. Remember, at minimum, you should have one detector on every level of your home, and in each bedroom.

Change Your HVAC Filters
Have your heating system inspected, serviced and cleaned annually. Proper maintenance can extend the life of your furnace, postponing an expensive replacement. Change air filters seasonally to monthly, depending on your home’s needs, to protect against major HVAC issues.

Block Out Pests
Prevent pests from setting up camp in your home by caulking small holes or cracks inside and outside the house to deter bugs. Also, use hardware cloth to cover any larger areas.

Mastering home maintenance tasks can be a chore, but by ensuring you’re not missing these all-too-often-ignored jobs, you’ll be able to rest easy knowing your home is that much more protected.

Source: Brentnie Daggett/RISMedias Housecall

Published with permission from RISMedia.

Our living environment often defines the way we live. Thats why its so important to design your interiors in a way that achieves a sense of harmony. More than just a shelter, the home should make you feel more relaxed, energized and motivated each day. If its time to decorate your new living space, here are a few important factors to take into consideration.

Proportion & Scale
Every designer will tell you that achieving the right proportion and scale are essential characteristics. Although theyre sometimes used interchangeably, proportion can refer to how different objects relate to one another in size (like a chair and a sofa), while scale is more likely to refer to how these objects relate to the size of the room. Before buying any new furniture, its always wise to take measurements and try to visualize how it will fill the space its intended for.

Color Scheme
Colors play a major role in how we perceive a space. For instance, while you may want bright and vibrant shades in the kitchen, perhaps the bedroom is better suited to more neutral tones that you find soothing. Coming up with the right scheme, whether its monochromatic or a combination, is one of the most important decisions youll make in each room. So, take the time to look for inspiration and choose colors that match the mood youre looking to create.

Traffic & Flow
You want your interiors to feel as if youre freely flowing from one space to the next. When arranging furniture and dcor, consider how youll move about each room and the way in which these items direct traffic. If you have to take an unnatural path to walk around a sofa or table, you may want to reconsider the placement.

Balance
Maintaining a sense of balance is key for any room. While sometimes this can mean symmetry, theres actually much more to it than that. From a visual standpoint, the goal is for the entire room to have a consistent impact or weight, rather than having lots of dcor on one side and wide open space on the other.

Published with permission from RISMedia.

If your loan servicer doesnt collect money for your property taxes each month along with your mortgage payments, youll need to set aside money yourself. If you dont, you may be in trouble when the bill comes due.

What Can Happen if You Dont Pay Your Property Taxes
If you dont pay your property taxes on time, the amount you owe will become a lien on your house. The authority that issued the tax bill can then hold a tax deed sale, in which it sells the house outright and the purchaser gets the deed to your home. It can also decide to hold a tax lien certificate sale, which allows the purchaser of the tax lien to collect overdue taxes, plus penalties and interest. If you fail to pay, the purchaser can foreclose on your house or convert the tax lien certificate to a deed.

A tax lien takes precedence over a mortgage. If a house is sold through a tax sale, a mortgage lender can lose out on the money its owed. Your loan servicer may pay the property taxes on behalf of the lender to prevent a tax sale and send you a bill for the taxes. If you dont reimburse the loan servicer, that will be considered default, and the lender will be able to foreclose on your home.

Options if You Cant Pay Your Bill
You might be able to lower your bill by appealing the assessed value of your home. Look for information on the appeals process on the property tax bill or on the tax assessors website. In most cases, youll need to appeal the assessed value within a relatively short time after you receive the tax bill and demonstrate why the assessed value of your home is inaccurate. In some states, youll have to pay the bill in full, then file an appeal and wait for a refund if the case is decided in your favor.

All states have property tax abatement programs that allow some people to reduce their bills due to factors such as age, disability, income or personal status. Youll have to file an application and meet eligibility requirements. Note that, in some states, homeowners arent eligible for abatement if theyre already behind on their property taxes.

If you dont qualify for property tax abatement, you may be eligible for a deferral thatll allow you to pay your bill later, or a repayment plan so you can pay your taxes in smaller installments over a longer period of time. Some states also allow the tax assessors office to compromise on tax amounts or to waive interest and penalties on past-due bills.

Look for a Solution
If you cant afford to pay your property taxes, the worst thing you can do is to simply ignore the bill. You might be able to reduce your tax burden or postpone payments. Contact the tax assessors office to discuss your circumstances and to explore your options.

This article is intended for informational purposes only and should not be construed as professional advice.

Published with permission from RISMedia.

If youre interested in buying a home, you want to make sure you only look at ones you can actually afford. Finding a house you love and making an offer, only to find that you cant get approved for a mortgage, will waste everyones time and leave you frustrated and disappointed. This is why its a good idea to get pre-approved for a mortgage before you start viewing homes.

What Is Mortgage Pre-Approval?
Pre-approval means a lender will review your credit, income and debts and decide whether to pre-approve you for a mortgage. If you get pre-approved, the lender will tell you how much you could borrow and approximately how much your monthly payments would be. Pre-approval means a lender thinks, based on a preliminary assessment, that you qualify for a mortgage. Its not a final approval, because your financial picture could change significantly between now and the time you bought a house.

Pre-approval is not the same as pre-qualification. Pre-qualification is based on a general overview of your financial picture. Pre-approval requires several documents (pay stubs; W-2s; tax returns; bank, retirement, and investment account statements; and possibly others) and a hard credit check. Since pre-approval requires a more rigorous financial review, real estate agents and sellers take it more seriously than pre-qualification.

A pre-approval from any reputable lender will help you get your foot in the door, but you dont necessarily have to obtain a loan from the lender that pre-approves you. You should shop around and get a mortgage from the lender that offers you the best interest rate.

Why Should You Get Pre-Approved?
If a lender pre-approves you for a mortgage, it will tell you how much its willing to lend you. That can help you figure out an approximate price range so you can focus on properties that are within your budget.

A pre-approval letter demonstrates that youre a serious buyer. Some real estate agents wont even show a house to someone who hasnt been pre-approved.

Being pre-approved can make your offer more attractive to a seller than an offer from someone who hasnt been pre-approved. The other prospective buyer may have bad credit and be unable to qualify for a mortgage. Pre-approval means youre in good financial standing, so the seller will feel comfortable accepting your offer.

How to Get Pre-Approved
Before you try to get pre-approved for a mortgage, request copies of your credit reports and check them for errors. Have any you find corrected. If your credit scores are lower than you expected, figure out why and work on getting your finances in better shape before you try to get pre-approved for a mortgage.

Once things are in order, apply for pre-approval and submit all required documents. With a pre-approval letter in hand, youll be able to look for houses in the appropriate price range, demonstrate to real estate agents that youre a serious buyer and increase your chances of getting your offer accepted.

Published with permission from RISMedia.