Portland Mortgage

Each lender has different requirements, but most follow standard guidelines. Other loan options allow borrowers to prove income by disclosing bank statements, but those programs cost more. Typically, most lenders want to see at least two years of business history by showing two years of federal tax returns and two months of recent bank statements. The time of the year can determine the type of required documentation. Some borrowers may need to provide a year-to-date profit and loss, as well as a letter of explanation about current operations. Depending on the type of business and overall borrower profile (Character, Capital & Capacity), a self-employed borrower may need to provide more documentation. In some instances, borrowers can sometimes use business accounts to purchase a personal property or refinance, as long as the use does not drain or put too much burden on its operations.

The agreement or mortgage describes the parties (who is the borrower and who is the lender) and the terms of the contract (interest rate, late fees, penalties, and the type of loan, among other items). The terms for a refinance are usually better than their existing mortgage. For example, many homeowners choose to refinance their home loans to reduce their interest rates. Other reasons for refinancing include removing a spouse from the contract due to divorce or reduce the term to curtail interest payments. Refinancing does not always make sense, but in some cases, it does. Many loans require proof of improvement to refinance, or the refinance is not allowed—types of loans that need the benefit include Veterans and FHA home loans.

A mortgage is an agreement used to purchase or borrow money against the value of a property. For example, you can refinance a home and cash out or reduce the current loan rate or term with a mortgage. The lender usually determines the process, timeline, and requirements to borrow. Typically, the lender underwrites a borrower's information to confirm their eligibility to the borrow. No lender wants to lend money where the borrower can't repay their debt. Lenders look at: creditworthiness (does the borrower pay back debts as agreed), capital (does the person have money in reserve to pay down monthly debts, or a cushion to support a job loss), capacity (is the borrower's income enough to pay for all of his/her obligations in a month and the new mortgage.) A mortgage details who is borrowing, who is lending, what payments are required, how long or what the repayment terms are, as well as penalties for a missed payment or possible foreclosure.