When purchasing a new primary residence or investment property, a survey done by the National Association of Realtors identified that six out of ten Americans think that getting a mortgage would be hard for them. According to senior economists at Lending Tree, the biggest barrier to getting a mortgage is the cost. Not the cost on the mortgage per say, but due to home prices skyrocketing, borrowers now have to borrower more money, aka take out a larger loan. When looking for large loans, lenders will require borrowers to have higher incomes or put down larger down payments. As a result, some are finding that they no longer can get pre-approved!
Another barrier presents itself to those who are looking for low value mortgages. There may be low value homes on the market, especially in urban, suburban, and rural areas, however these borrowers are finding that fewer lenders are offering small dollar mortgages. Thankfully, most brokers today work with many lenders offering small AND large dollar amount mortgages.
Due to the pandemic, many had income disruptions for more than a few months, making it harder to get their income to qualify. Even if your income is returning, those who have dings on their credit are still finding it hard to qualify. For these borrowers, a NON-QM or NIV loan (No-income verification), might be your best bet.
The past 2 years have been especially rough on self-employed borrowers. The Bayside team worked in retail during the early pandemic and the direct lender we were employed at would not accept self-employed borrowers! Your business could have skyrocketed during the pandemic, and we still would not even look at your loan. A huge reason we transitioned into brokering was to be able to work with many types of borrowers and we happily accept self-employed applicants. However, there is much added scrutiny to self-employed borrowers. Lenders will checkout everything in the company from business and personal tax returns to your website, to your bank statements and Profit & Loss for the last 3 months, YTD and two years! Some lenders are tougher on self-employed, while some take ease with their qualification. If you are a self-employed applicant, we highly recommend shopping around with a broker to ensure you find the best deal.