Small business owners often have a difficult time being approved for loans and mortgages due to the inherent perceived risk of many small businesses. In Angela’s case she has demonstrated success over 10 years and expanded as well into suburban markets in the Santa Barbara area. She appears to have an excellent client base that generates repeating revenues.
She is in a unique situation to be able to negotiate with the bank, based on her strong cash flow and business income. Angela will need to be prepared to open her company books for review to confirm her statements and demonstrate the low risk that she implies with her loan application. Although the bank may offer her a more competitive rate, the rates at the bottom of this post are for current rates, plus Large Conforming loans and FHA loans.
Large conforming loans are slightly more competitive than the best advertised rate. They are approved for certain areas of the city, however this rate would only reduce her monthly payment by approximately $5 per month. We also added an FHA loan rate which is a mortgage guaranteed by the Federal Housing Authority. Angela, likely would not be interested in this type of mortgage and the cost would drive up the monthly payment by approximately $78 per month.
Angela also has a very large down payment from the sale of her existing home. Her credit rating is excellent and she can easily carry the mortgage payments based on her monthly income. Further information about other savings accounts and retirement accounts might also be of interest to the bank that approves her mortgage to show that she has the financial backing to weather any financial storm that may occur. Angela will likely have her mortgage approved easily with the additional information mentioned in our assessment.
Home/Mortgage Loan Amount :: $250,000
Home Loan Application and Processing Speed (when do you need the funds):: Need ASAP, ready to make an offer on a home here in Santa Barbara
Do you currently have a mortgage? :: Yes, current home has just been sold, will be discharging existing mortgage on sale of home
Bank Name and Branch :: Wells Fargo, Cliff Drive
What City/Town, State and County do you live in? :: Santa Barbara, California
What is your employment field? ::Small Business Owner, Hair Salon
Employment Position :: Owner
When are you paid? (monthly/weekly/biweekly):: Monthly
Your credit rating to be – excellent, fair, or bad? ::Excellent, no personal outstanding debts
How did you find us? :: Online
How are you paid? (direct deposit/paper check):: Direct deposit
Gross Amount Per Paycheck :: $16,600 / month
Do you agree to have this information published online, without your PRIVATE information of course? :: yes
Extra information here please (some detail):: I have just sold my current home and will be discharging the mortgage that I have on this house as soon as the sale is completed. I anticipate that the net proceeds from the sale will be $200,000 which I plan to offer as a down payment on the home that I would like to make an offer on, once I have approval for this mortgage application. My down payment is substantial since my home was one of the few homes that has held its value and I have paid a substantial amount on it over the years that I have owned the home. My credit rating is excellent. I have no outstanding debts other than the current mortgage on my present house.
Note to Lender :: I am also owner of a very successful hair salon here in Santa Barbara. We cater to all of the elite in Santa Barbara at my downtown shop and then I have several smaller salons in the suburbs. I have owned my hair salon business for 10 years and built it into a very successful operation that has withstood the economic downturn here in California. We offer hair styling, pedicures, massage and personal makeup services here at the salon as well as we provide onsite service to some of our elite clients who cannot make it into our salon downtown.
My take home salary is very high and reflects the success we have had in this business over the years. Although I have applied for a 30 year mortgage, I fully expect to pay this mortgage down more quickly, however prefer the flexibility of lower monthly payments for cash flow and tax purposes. I am also open to additional financial discussion regarding my business interests and potential expansion should we be able to work out an attractive deal regarding my personal mortgage.
|Category: Home Mortgage Loan||APR 4.812%||APR 4.76%||APR 5.523%|
|Length of Term||30||30||30|
|Amount to be paid||$430944.38||$428989.04||$457679.93|
|Total interest paid||$180944.38||$178989.04||$207679.93|
|Paid per installment||$1180.67||$1175.31||$1253.92|