Interview with Leslea Williams – At Home Lending
Interview Qs
Basics and Setting the Stage
- What are the biggest challenges self-employed buyers face when trying to qualify for a mortgage?
- How is the mortgage process different for self-employed borrowers compared to traditional W-2 employees?
- What’s the minimum amount of time someone needs to be self-employed before they can qualify for a home loan?
- What documents do self-employed buyers need to have ready?
(e.g., tax returns, P&Ls, bank statements) - With more buyers working side hustles or gig jobs, how does that income factor into getting approved for a mortgage? Can they use it to qualify?
Income Verification and Strategy
- How do lenders typically calculate income for self-employed buyers?
(Is it based on adjusted gross income, taxable income, or another method?) - Can buyers use business assets or retained earnings to help qualify?
- Are there ways to structure their income better before applying for a loan?
- If a buyer writes off a lot of expenses to lower taxable income, how does that impact their loan approval?
Types of Loans and Programs
- Are there loan programs designed specifically for self-employed buyers?
(e.g., bank statement loans, no-doc/low-doc options) - What’s the difference between traditional loans vs. non-QM (non-qualified mortgage) loans for self-employed individuals?
Preparation and Timing
- How far in advance should a self-employed buyer start preparing to apply for a mortgage?
- If their income fluctuates year to year, how is that handled in underwriting?
- Would you recommend any specific strategies to make their application stronger?
(e.g., paying off debts, saving for a bigger down payment)
Common Pitfalls and Advice
- What are the most common mistakes you see self-employed buyers make?
- How important is it to work with a lender experienced with self-employed borrowers?
- What advice would you give to a self-employed person who wants to buy in the next 6-12 months?
Bonus Questions (if time allows)
- Can they use personal and business bank accounts together in the qualification process?
- How does being an LLC, S-corp, or sole proprietor affect the loan application?
- How can people get in touch with you if they have more questions or want to get the process started?
Transcript
[Michelle Rene]
Hey there, this is Michelle Renee with Windermere Coeur d’Alene Realty and I’m here with Leslie Williams and you’re with At Home Lending. I’m gonna let you introduce yourself in a sec but I just wanted to put out there that we are getting together and we’re gonna give some awesome quality information for people who are self-employed and looking at getting a home loan. So.
Good stuff. Yes, I’m so excited. So, I’m gonna just kind of jump into some of the questions.
Absolutely. Well, before we do that though, can you give a little background on who you are, just share with people if they don’t know you already. We’re here in the Coeur d’Alene market, North Idaho specifically.
But yeah.
[Leslea Williams]
Yeah, I am Leslie Williams and I’ve been a mortgage broker for over 20 years. Started in California with a custom home builder and went into business development for them, training loan officers, so lots of deep background. I’ve been in retail, I’ve been in direct lending and have not left brokering since 2005.
So, now I own a brokerage in North Idaho.
[Michelle Rene]
North Idaho, we love. So, I’m gonna, I think a lot of these things would be applicable to people wherever they are but for me, I’m very local here to the Coeur d’Alene, like Kootenai County area and we both have offices downtown, Coeur d’Alene. So, a lot of roots here but I think one of the things that, I mean, I’ve run into it myself and I know my clients have too is when you’re self-employed and you’re getting a loan on a home, there’s so many questions, right?
So, I imagine you get this all the time, it’s like all the usual suspects and but I feel like there’s things that people make assumptions about and maybe they’re not necessarily true or maybe there’s different lenders that can kind of do it differently than others.
[Leslea Williams]
Absolutely and a lot of the time self-employed, my first question is what do you make? What is your income? What kind of tax return do you file?
And probably 50% of the time, they don’t know. They don’t know if they’re a Schedule C, if they’re sole proprietor, if they’re LLC. They don’t know if they get pay stubs which you can if you’re self-employed, be salaried and stuff like that.
So, it’s doing a lot of education and discovering what they don’t know sometimes. So, that’s kind of.
[Michelle Rene]
It’s half the battle, right?
[Leslea Williams]
Half the battle.
[Michelle Rene]
Let me, my first question is what’s the difference between a traditional loan versus a non-QM or Qualified Mortgage Loan for self-employed people?
[Leslea Williams]
So, traditional loans is your regular, conventional, FHA, VA, those kind of loans that people hear about all the time. Non-traditional loans are non-qualified mortgages. I like to describe them in the middle of traditional loans and private money.
So, they’re not as expensive as private money but they’re more lenient on a lot of things and offer different programs. If you don’t fit in the box of the traditional.
[Michelle Rene]
Okay.
[Leslea Williams]
Full document tax returns with conventional and those loans.
[Michelle Rene]
Okay.
[Leslea Williams]
And non-QM loans have that alternative documentation.
[Michelle Rene]
So, because they’re more lenient, does that mean the rates are not as great or are there other negatives?
[Leslea Williams]
It depends. I’ve had loans that we compared both because we always want to start with their tax returns. We want to see if they can go conventional or FHA or one of those other full doc options because it is better rates typically, lower closing costs, lower potential for down payment.
The non-QM loans are gonna require at least 10% equity. So, that’s if a purchase or a refi because you can do them for both. Okay.
So, but closing costs are gonna be higher and the rate actually had one where they were putting a lot of money down and conventional rates were pretty up there and it was only a quarter percent higher. Okay. So, not always are they gonna be so drastically different but they are, it is going to be a little higher.
[Michelle Rene]
So, it’s like the typical answer is, well, it depends, right? It does depend, yeah. It depends.
Yes. On a lot of things. I mean, on the borrower themselves.
[Leslea Williams]
Yes.
[Michelle Rene]
And their situation.
[Leslea Williams]
One of my favorite questions, not, is what’s my rate? What’s the rate today? Because it’s so, there’s so many calculations that goes into an interest rate and it’s not a one size fits all.
And especially with being a broker, we have over 100 investors. So, we don’t just have one rate. We can shop it around and somebody may have the exact same product, even on these non-QM loans and have a whole different half a percent or so interest rate.
[Michelle Rene]
Okay. Okay, so my next question is, how far in advance should a self-employed buyer start preparing to apply for a mortgage? How much?
[Leslea Williams]
As early as possible, especially if you think you’re going to become self-employed. It’s important to know how that income is calculated and we can show them all that. It’s not cut and dry.
So, a wage earner, you’re gonna have your gross income, your tax returns. They don’t care what you paid in taxes. It gets based on the prior number, not with self-employment.
With self-employment, it’s based on your net income. So, minus your expenses, your deductions. So, that number that people see in that top line that looks really impressive is not the income that we get to give them.
Right, okay.
[Michelle Rene]
Yep, I remember that. Last time I bought. Okay, so if the income fluctuates year to year, which is usually the case with someone self-employed, you might have a great year or two or five and then you have a bad year.
So, how does that work?
[Leslea Williams]
So, no matter what loan type, we still have to pay attention to declining income and the last few years have been challenging for some. Some have had better years than others, but if your bank statements show declining deposits, even with that loan, we may have an issue with it. So, we want to make sure that they are keeping track of their expenses, their income, especially the credit, and kind of predict this is what my year’s gonna look like and plan for it now so that if next year gets better, because we have to pull in potentially two years of an average, even if we’re doing a conventional loan, sometimes one year.
So, if you have a lower year and a better year and it’s requiring that two-year average, then it’s gonna bring you down from the previous year. So, all of that, if you know how to plan it, what loan type we’re going with, then the sooner you know your numbers, the better.
[Michelle Rene]
Okay. Okay, what about specific strategies to make their application stronger?
[Leslea Williams]
So, kind of what we were just talking about, knowing your income, knowing your debt. A big one for business owners is when they have business debt. It can be really challenging to exclude that debt, so I would say probably maybe a little over half of the self-employment applications have business debt.
Car payment or something, and just because the business pays that payment, there’s other factors that go into it. So, we want to look for them on the tax returns, or if it’s a bank statement loan, it’s not as big of a deal, it’s structured differently, but if you are trying to go full-doc, make sure the debt is on the tax returns, pay attention to who’s on the note of the debt and who’s paying the debt. So, if it’s a mortgage and it’s titled to an individual, but titled to, or I’m sorry, the mortgage is in the individual’s name, but titled to an entity, and they’re trying to exclude that by paid by others, that’s gonna be problematic.
So, that can be a deal killer.
[Michelle Rene]
Well, that kind of leads into my next question, which is what are some of the mistakes people make when they’re self-employed, and what do you see on a regular?
[Leslea Williams]
That one is probably the biggest one, or not consistently paying, or making, you know, I just gave myself a $5,000 raise a month ago. Those kind of things that they think are doing, they’re doing it right, we would have to talk about ahead of time so that they know this is what you need to do in order to do that, because you can get those things done and accounted for, but you have to do it in a certain way. Okay.
[Michelle Rene]
Okay, and then how does someone choose what lender to go with? I mean, obviously, we’re sitting here, we want them to call you, we’re gonna give your info at the end, but what are some things that people should be asking or looking out for when they’re choosing a lender?
[Leslea Williams]
Well, you definitely want to not rely on everything you read on the internet, and use that as your basis to ask a lender questions, because if you don’t know, you don’t know what they don’t know. So they may sound like they know what they’re talking about, but, you know, with bank statement loans, they’ve actually been around since, gosh, probably 2014. A lot of these programs have, but they’re just coming into the market now with a lot of lenders because of the changes.
You know, the market has shifted, and it’s not a viable way for self-employed to get loans sometimes. So they may say they know what they’re doing, you know, and then you get into it, because I’ve had some come to me, and then, you know, they don’t qualify, but it’s something that if you knew what to look for from day one, they wouldn’t have been put through that process. And interest rates vary drastically from lender to lender sometimes, too.
I’ve had the exact same criteria, quoting a whole percent higher interest rate, or double the closing costs and things like that. So we have control over our fees to an extent, so we don’t have, you know, corporate telling us what we have to charge. So that’s a little.
[Michelle Rene]
One of the nuances of a mortgage broker versus a bank or credit union, right?
[Leslea Williams]
Which I love all lenders. I’m not saying anything about, you know, it’s just the way that things have to be done with some of them can vary. And we all do something similar, we just do it differently.
So making sure somebody knows the program and guidelines is essential, and actually reading through it, and not, you know, taking copies of everything, and oh, you have a 700 credit score, you’re good. Because that can, that’s one factor. But there’s, you know, all these other things to look at.
[Michelle Rene]
Okay, what about the difference of LLC, S-corp, sole proprietor, how does that affect the application?
[Leslea Williams]
So they’re all still gonna be calculated with self-employment income. A big question I get a lot is, oh, I’m an independent contractor, so I’m not self-employed, or the gig, you know, all those people, some of them are W-tude, or go from one to the other, I’ve seen both, but it’s still considered self-employment. So, especially with young kids, there’s a lot of kids that are self-employed, and they don’t know what a tax return is, or how to file it, or a schedule C, oh, I had to track my mileage, or, you know, all that stuff.
So definitely talking to someone like that in the beginning, and advising them to sit down with their CPA, and get it all dialed in, so you know what you’re needing to account for, because you can’t go back a year later and say, well, now I’m gonna go back and do my mileage. How are you gonna do that? So, and that’s, you know, can be a plus on your tax returns, so.
[Michelle Rene]
Okay, well, I know I went out of order on some of these, but I’m gonna back up here. So what are some of the biggest challenges that people are facing when they are going for a loan, when they’re self-employed?
[Leslea Williams]
Definitely the proof of income is always a problem. I maybe have a handful of people over the last 20 years that actually know what their income is. Every time, for the most part, I think they think that it’s that big number, like I said, or a little number, sometimes it’s not big, but.
[Michelle Rene]
It’s all relative.
[Leslea Williams]
Yeah, exactly, especially lately. But yeah, they just don’t know. They don’t know, you know, even when I go through bank statements, I’m like, how much are you spending a month?
I don’t know. I don’t have a down payment, but there’s $500 of Starbucks and things like that. So just sometimes having directive from someone who’s outside of your situation and guiding you, okay, well, pay attention to this, you know, is gonna make or break the, because you can plan for your tax returns.
Once they’re filed, you can’t really go back and amend them unless there’s a valid reason, and that’s another thing people always say is once they know what their income is, they’re like, well, I’ll just go amend my taxes. So that’s not, talk to your CPA about that, but not always a good idea to do that.
[Michelle Rene]
Right, and then debt-to-income factors in, right? So how should the borrower be looking at that?
[Leslea Williams]
So counting, trying really hard to separate personal from business, because a lot of people have, let’s say we’re going with a bank statement loan and they get Venmo payments or things like that, and they have a business account and a personal account. We can still use that, a personal and a business account, but for them, it’s a lot harder for them to even know where they are because they’re commingling funds. So it’s best to separate everything.
Have a business account, have a personal account if you can, and, but some people don’t. Some people are sole proprietors. They operate in their own individual name and use a personal account for business.
So that’s a good on a bank statement loan, but when you’re trying to prove, for example, the debts, which is always a revolving question that comes up, if it’s on a personal bank statement that’s used for business, we’re not going to be able to exclude that because it’s paid by you individually, unless it says it’s a business account, so.
[Michelle Rene]
Well, and I think that kind of touches on the next question. How is a mortgage process different for self-employed versus the W-2 employees?
[Leslea Williams]
So W-2 or wage earners, you know, your salary, your hourly, you get a paycheck from your boss and you go home, file your taxes. Self-employed doesn’t, the tax returns are not cut and dry. There’s pluses and minuses and deductions and additions and it’s kind of a complicated calculation.
So, for example, last week I had one that had a 200 something thousand dollar loss on their K-1. But by the time we analyzed the tax returns and did the calculations, and they were also turned down by another lender, by the way and they said, you have a business loss. They didn’t because there was things that we could add back into the income.
[Michelle Rene]
Okay.
[Leslea Williams]
So it went from them not qualifying with wherever they were to qualifying because we understand tax returns. You know, we own a business, we’re self-employed, so we understand how that process works. And looking through everything, they were, I mean, it did appear that they were not gonna qualify, but they did.
We ended up reversing that to about 19,000 a month. Nice. So, yeah, it was, you just gotta look through.
[Michelle Rene]
Being able to add back in the allowable items.
[Leslea Williams]
Exactly.
[Michelle Rene]
Yeah, okay. Awesome, that’s great. Okay, what’s the minimum amount of time someone needs to be self-employed before they can qualify for a loan?
[Leslea Williams]
So, one year with some programs. Two, if you’re newly self-employed and your tax returns show income, two years. If you haven’t been self-employed for longer than five years, then typically we have to have a two year tax return with those programs.
But with a bank statement or non-QM, you can be as little as one year. I did get an exception for someone last year that had been self-employed for 10 months.
[Michelle Rene]
See, this is so interesting because I just always thought it was two years. Hard no if you’re not in business two years or more. And not even in business, but you have two years of tax returns to turn in, which means you’re in business probably two, at least two years and a quarter, right?
So, that makes it tough. And also, if you start it, I mean, maybe some people start January 1st, but a lot of people, maybe they started in, I don’t know, July or October or something. So, your first year tax returns are low.
And then year two is really your first full year.
[Leslea Williams]
Right, we do look at the incorporation date. So, that can kind of get situated, but a lot of lenders do require two years, period. So, that’s up to them because they can have overlays.
Guidelines, Fannie Mae, Freddie Mac, we pretty much try to stick to whatever that says, and we try to run it through simultaneously. So, if there’s Fannie Mae and Freddie Mac, run it through both because you may get different results. So, like for example, I had one return, just one year tax returns, and the other ones say we needed two.
So, that could be the deciding factor between qualifying for more or qualifying for less.
[Michelle Rene]
Okay, okay, interesting. Something that just dawned on me, some people might be getting confused. So, can you explain the difference between a bank statement loan and a stated income loan?
Like back in the day, there was the stated income loans, right? Yeah, everyone’s eyes get big, so.
[Leslea Williams]
Yeah, I have another fun one with that. So, I remember someone that worked at a fast food restaurant, they were a manager, made decent income. And back then, this was 2005 probably, he wanted to state his income to get qualified for a higher house.
And I said, well, I still wanna see your tax returns and your income and all that. And I told him, you don’t qualify. I’m not, I don’t think it’s wise to put, to say you make more income, even though the program was available, and you could totally do that back then.
And someone else did do the loan for him, but two years later, he called me and he was in foreclosure. So, it’s no wonder that that particular program is not here, at least structured that way. There are ways that you can do stated income-ish type programs, but that’s a whole nother.
[Michelle Rene]
Yeah, yeah, but a bank statement loan is you’re looking.
[Leslea Williams]
Yeah, so that one, it’s not stated. What it will do is it takes the deposits in the bank account and let’s say it’s 100,000 for the year. Then it’s depending on the expense factor of the business, then we can use 50% of the deposits or 60 or 70, whatever their expense factor is, and convert that to income.
So, and that’s, it doesn’t, we’re not stating the income, it’s calculated by eligible deposits. Got it, okay.
[Michelle Rene]
All right, and then what do, what docs do self-employed people need to be prepared that you’re gonna be asking for?
[Leslea Williams]
We always still wanna start with the two-year full everything. Even if it looks terrible and they know they’re not, they know their income, we still wanna start there and look at that and show them, here’s how this is calculated. Maybe next year, see if there’s a different way to deduct this or that or whatever.
And then if they don’t qualify for that, then we look at these alternative options. And they have P&L loans, so it’s a profit and loss statement. We can do 1099 only.
The bank statement is probably the best out of those because it’s, we’ve seen more favorable rates on those. And the P&Ls can be eligible, but if that’s not gonna be a healthy P&L, it’s not gonna work. So that’s usually why we end up back at the bank statement loan.
[Michelle Rene]
Okay, and then talk a little bit about, so it’s something that I see on a regular, and I feel like it’s getting more and more common, not just because of the economy, but also people are just used to doing these little side hustles. Maybe you do Lyft or maybe you do, I don’t know, one of the other, Uber or something, all of the above. You’ve got this gig economy going on, right?
So maybe instead of just two traditional W-2 wage earners, you have, maybe you do still have some W-2, maybe you’ve got one or two little side hustles, and then the spouse might have one or both of those. So can you address that?
[Leslea Williams]
That’s really common right now, especially with the younger crowd, and I say younger, my daughter’s 23. Her age group, they do not wanna have one job. They need two jobs at all times, or even three sometimes.
So that income, depending if it’s W-2 or not, still has to have that two-year average because it’s variable income. So the two-year average, if it’s W-2, as long as you’ve been there for two years, we can average it out. If it’s part-time and you’ve only been there a year, we can’t use that because it has to have that two-year average.
So, and if it’s 1099, which some of these are, then that’s- Actually, a lot of them are, yeah. Then that’s gonna be that self-employment category. And sometimes self-employment income does pan out.
It does calculate. It’s just been a little harder for people the last couple years. So it depends on how everything kind of pans out on your tax returns, and right now is the perfect time, if you’ve already filed, to think about next year’s taxes and looking at this year’s if they don’t work, or if you didn’t know, a lot of people do not know they file a Schedule C.
And when we look at their tax returns, I’m like, you’re self-employed. Yeah, but they’re like, what’s a Schedule C? So just, yeah, that’s not out of the realm of possibility.
We can definitely still use multiple jobs. Okay, awesome.
[Michelle Rene]
Okay, is there anything that I didn’t touch on that you wanted to make sure we went over?
[Leslea Williams]
Let me read my notes here.
[Michelle Rene]
Yeah, and the thing is, so what I will say while you’re doing that is what I find, I think, is kind of common is people, especially self-employed people who have a business, they’re busy, right? Everyone’s busy. I mean, we’re all busy, but when you have these questions and it’s something that you’re wanting to do, it’s a life goal, and maybe you’ve bought in the past, maybe you haven’t, but for whatever reason, the market conditions right now, not gonna lie, they’re tough for a lot of people.
So it’s actually why I’m doing this, because I feel like maybe there’s some myths that we’re dispelling. Maybe it’s not as bad as people think. Maybe if they tweak this or that, then it changes everything and changes their situation.
So if they’re educated and they know, okay, well, maybe I can’t do it right now this minute, but maybe I can do it in six months or on the next tax return next year, this time next year.
[Leslea Williams]
Oh, that actually reminded me. We do have a bank statement with as little as three months. Now, the rate is higher, but that’s good for seasonal people, and we’re in a seasonal town.
So some of the jobs are not all year round. So that is another option, three months, six months, because if you have 12 full months and you have only income here, it looks like your income is going down. So timing those is another option too.
I mean, there’s all kinds of things that we can hit on and go over that I think people don’t be like, I’m scared, I don’t wanna look into it, because if it’s something positive that you didn’t even know existed, then you don’t have to wait sometimes. And sometimes that happens and people are like, I could not believe I qualified. You know, and if you do go into a bank, which a lot of people have that relationship and they just think this is the best place to get a loan, I’m gonna go in there, do my deposits and talk to someone.
And then they look at their tax returns that have a loss, a true loss, and they just say, no, we can’t help you. And that’s not their fault. That’s just what they offer.
So just because one lender says no, don’t always go with that. Try to get a second opinion.
[Michelle Rene]
Yeah, and I think that was my point is what I’m getting at is to be informed, right? So even if you really are in a situation where it’s not gonna work right now this minute, I think it’s so much wiser to have a game plan. And until you sit down, I can’t tell you, you know, I’m a realtor, right?
So I’m out there, boots on the ground, I’m talking to people, they’re calling me or we’re at an open house or whatever. And they haven’t talked to the lender yet if they need to get a loan, you know, some, not everyone does, some people are buying with cash, but for anyone who does need to go get a loan for whatever amount, whether it’s, you know, 50% or 80 or some of the loans, first time homebuyers, or, you know, you can get into FHA for, what is it, 3 1⁄2% or something, 5% for, is conventional minimum 5%?
[Leslea Williams]
Some is three. And we did at one point have a 1% down with a 2% grant. So there’s always, you know, and hopefully we see some more opportunities like that that make things more affordable.
Because even for people that do have money, it is still challenging.
[Michelle Rene]
Right, but that’s my point is just with that topic, you know, a lot of people don’t know, they think, oh, I have to have my 20% down before I can pull the trigger on anything. And maybe they’ve got the five or 10%, but they just, because they’re busy with their own life and their job and, you know, all the things. So it’s just, I feel like it’s not just business planning for your business, but it’s, you know, your life goals.
And to at least get a game plan together and know, okay, my next step is in three months, or when I get to X amount, then we can pull the trigger on this other thing.
[Leslea Williams]
Exactly, because planning even three months out can mean a difference of you getting something a little bit more expensive or, you know, just not last minute, because then you get disappointed. And that sometimes those people fall off because they found a house they love and they can’t qualify right now. And then you tell them that, or, okay, let’s plan on it.
I mean, I’ve had clients that I’ve worked with for three years, four years, and it took that long sometimes. But that’s okay, because if that’s your goal, then we’ll do whatever it takes to work with you and stick with you and give you the education that you need. And, you know, you can text us, you can call us.
It’s not, you know, like a nine to five. You’re the same way. We just, whatever you need.
[Michelle Rene]
Right, well, and I think sometimes there’s maybe other creative things that people can think about doing that they didn’t consider. Like one, I’m a fan of, you know, maybe you buy a duplex or a fourplex. You own or occupy, so you’re gonna live in one.
Does everyone wanna live in that situation? No. But does it have to be forever?
No. Now, all of a sudden, you have a primary resident situation, which means you have better rates than if you were to just go buy an investment property that you don’t live in, right? And then for a period of time, you’re, what is it, a year, two years, or whatever.
And then you can move on to your next thing, but now all of a sudden, you have this amazing opportunity.
[Leslea Williams]
Yeah, I actually have a client that did just that and they own a duplex, self-employed. We’ve been working on it for a year, so that was their plan, is we’re gonna live in this for a couple years, knowing it’s not our forever, fix it up a little bit and they are able to almost double the house that they paid for with the duplex, keep that, rent it out and have that offset the new house payment. So, and with a bank statement loan, so.
[Michelle Rene]
It’s an awesome plan. I feel like it’s shocking to me actually that people don’t do that more, but in this area it’s actually kind of tough because there’s just not a lot of, the category is like small multifamily, right? So the lending rules change is my understanding, so correct me or speak to this a little.
My understanding is if it’s four units or under, you can get a loan like any other loan on a regular single family home, right? But if it’s five units or more, now that’s a commercial loan, all different rules, so you can’t do what we just talked about. Is that right?
[Leslea Williams]
Yes, and we do have commercial options. We do have some stated commercial options for commercial properties. And with the duplex, you can do, or up to four-plex I should say, you can do FHA, you can do all those.
There was a lot of advertising going around that said become an investor for as little as 5% down. Did you see those?
[Michelle Rene]
No.
[Leslea Williams]
So that was regarding the change with Fannie Mae’s guidelines because you always need a 15% down on a multifamily, even if it was your primary. Well, they changed that and people were calling all day for a couple of weeks, like, I can get an investment property for 5%? What that very misleading advertise was saying, and it was from someone I won’t name who, whoo, mortgage, no.
They, in the very fine details, it has to be your primary residence, so you had to move into it, live in it, and then you could become an investor that way. But yeah, that was fun to explain.
[Michelle Rene]
And not everyone wants to be a landlord, right? So that does not fit the bill for everybody. But for someone who is willing to live for a period of time in that scenario, I mean, why not?
Our area just does not have a lot of inventory with small multifamily. They go kind of quickly or they’re very high-priced and so people aren’t willing to do it. But anyway, just this is just one of those things that if that little tidbit, if that is your new plan, like now all of a sudden we just changed someone’s life, right, like that’s.
We do that a lot.
[Leslea Williams]
Yeah. Because we, I don’t take no. So if I see something incredibly challenging or someone comes to you and they want something totally out of possibility, we try to educate and show them, well, this isn’t doable, but this is doable.
Because sometimes people just need someone to tell them because they don’t know or they just want someone to tell them. And then once you tell them kind of what you should be doing then they’re okay with it.
[Michelle Rene]
Yeah. Well, and I think you make different decisions too based on those goals, whether they’re new goals or old goals. But if it’s top of mind and you’re like, oh, maybe I won’t take that big trip to wherever because that’s gonna be 10 or 20 grand or something.
And it moves you closer to your goal where if you don’t really know what you’re going after, it’s just gonna take you so much longer to get there. I’m big on goals right now. I have changed my fitness and my health and it’s top of mind, but it applies to so many areas of life, it’s not just health.
[Leslea Williams]
And you have to know your goals or you won’t know where you wanna go or how to get there. So if you don’t tell your time where to go, your money where to go, your friends where to go, if you need to work, you know, I can’t go tonight, whatever, it changes. Like you said, it changes everything.
I was never, I knew what I want and it was always in my head, but I never put it down into goals. And when I started doing that, thanks to my business coach, it changed everything personally that, I mean, things that I didn’t even think it was gonna affect and I didn’t realize it until I started putting it into play and everything else was falling into place. So that’s the same thing with home ownership or anything else.
And there’s a lot of positives right now with home ownership, you know, it’s not doom or gloom every day and people are still buying and selling. So don’t, you know, just look at Google and your taxes and your insurance and everything that that represents, because that’s not, here in Idaho, we bill based off of the current tax bill. So if you’re, you know, on Zillow’s calculator or something like that, and it says this house is gonna be $400 a month and we pull the tax bill and it’s 250, then now maybe you can qualify for a little bit higher price because we’re looking at each individual property when we do an estimate for people.
So sometimes you qualify for more that way, sometimes it’s less. So.
[Michelle Rene]
Well, and also again, just to, I mean, we’re here doing this because we wanna help people in their situation, right? Like we’re not getting paid for putting all this information out or whatever. I mean, I guess indirectly we are assuming people.
He’s paying us. Yeah. So people are, you know, gonna contact us and get our help.
But it’s, I just feel like being informed, like that’s everything. And one of the things I think people are confused about or it makes them hesitate, like things are, I remember doing open houses and just hearing over and over and over again before the election. So like, let’s say summer, last summer.
Oh, we’re gonna wait and see what happens with the election. We’re gonna wait, we’re gonna wait, we’re gonna wait. And since the election, I feel like we’re in the same boat because of this volatility.
Things are, I mean, just even today, like just bananas and then, you know, people are elated. And it’s this.
[Leslea Williams]
It’s an emotional rollercoaster.
[Michelle Rene]
It is, it’s so emotional. But one of the things that I like to, besides just educating, there’s some opportunities. There’s always gonna be an opportunity on one side or the other.
So yes, it’s hard for buyers right now. The interest rates are high. The prices have not come down like some people thought.
There was gonna be a big crash and, you know. It just, I mean, I’ve been doing this in this area since 2017. And literally, there’s always people that think, like, oh, these prices are so high.
There’s just no way they can go higher. And look where they are from now to 2017. But my point is, like, right now, the opportunity, in my humble opinion, for a buyer who’s qualified, they’ve done all the legwork, we know what the number, you know, the target is, is let’s go make some offers on things.
You know, let’s find the properties you love and get some options. And then you make some offers. And you don’t have to offer full price, number one.
You can ask for concessions, number two, right? Maybe you’re going for a lesser home than you thought. So you’re gonna sacrifice a little bit, but you, at least you’ll get in the game instead of being not in the game and here two years later or five years later, you’re still waiting.
[Leslea Williams]
Yeah. During COVID, there was probably 100 people per house. You know, it was crazy.
It was. And out of those people, I would routinely talk to people that said, oh, they’re just gonna keep going down. I’m gonna wait.
And that was when they were already in the twos. And I think the lowest I ever locked in was one and a half.
[Michelle Rene]
Oh my God.
[Leslea Williams]
Yeah. So, I mean, rates were insane, crazy. But that also, there was a lot of negative to the market because first time homebuyers hardly had any chances.
Houses were going way over list price, no concessions, no inspections. Sure, we’ll give you this house, but we want a 10 day close. You can’t do an appraisal.
You can’t do an inspection. You know, the negotiations were not protecting people. Or they felt like pressured to get this house, which wasn’t ideal because they thought I’m never gonna be able to get one again.
But now it’s created a totally different problem with the low interest rates because a lot of those people don’t want to sell or it’s an Airbnb or something like that. So they’re holding that inventory kind of hostage right now. But psychologically, a lot of those people, because we’ve become therapists, we know everything.
People tell us things that I’m like, I do not want to know that.
[Michelle Rene]
But- That’s another topic, wouldn’t that be a fun one?
[Leslea Williams]
Oh, we should do one with all the stories.
[Michelle Rene]
I’ve heard people, yeah, like learning they got cheated on because they were going for a home loan.
[Leslea Williams]
Oh yes, I’ve been in, yeah, I’ve had that happen. Okay, I won’t say it right now. That’s a different one.
But a lot of those negative people say, well, I only thought that because I didn’t think I had a chance. I didn’t think I could qualify. I didn’t think I could get that house.
[Michelle Rene]
So just- Yeah, that’s my point is there’s opportunities out there because it’s harder. For sellers, if their house is listed, they do want to sell their house. So maybe they’re not gonna get what they thought or maybe they are going to, maybe they refused a few offers, but another one comes in and they’re finally, they waited long enough and now they have to go do something that they weren’t willing to do a month or two ago when they first listed.
[Leslea Williams]
So- Do you still see a disconnect with sellers and buyers? Do they still think this is my house is worth a million dollars and they’re like, oh, it’s worth like three.
[Michelle Rene]
So- It is funny, it’s kind of, there’s a lot of psychology with, and obviously we’re gonna look at stats and the numbers and what the market is doing in that neighborhood, but things fluctuate and people have different life circumstances. So that’s a big factor right there, are they gonna just wait it out regardless and because they want their price? Some people can do that and they’re fine to do that.
They’re not gonna move on until they get their price. Other people, they gotta sell it in a month. And so obviously that’s gonna change their decision on if an offer comes in under what they wanted.
They might be willing to make some, or make some concessions. And one thing for buyers who, they’re just in this pickle and they think there’s no options, the builders, if you’re buying new construction, one, you’re getting a new construction home and so you’re not as worried about things breaking down or having to replace the HVAC a year after you move in. But also the builders are, they have an appetite to sell that house and so they will give concessions now that you weren’t seeing back in when things were going bananas.
I mean, buyers were on a waiting list. It’s like, you’re lucky if you can buy my house. And so since that’s, things have turned around in that way, I just feel like there really are opportunities for someone who’s a solid buyer and they’ve got all their ducks in a row, you have some power in that situation, in that scenario.
So.
[Leslea Williams]
And even, I would say more so, the challenging files have been more prevalent to where we’re being, okay, let’s see if mom and dad can co-sign. Let’s see if grandma can. Let’s, just a whole bunch of different ways that we can structure things and barely, barely making it fit.
And that’s just the reality for some people is they’re barely making it work, but barely making it work is still making it work. And we’re not going to approve a loan that you can’t afford. That’s just kind of gone out of the window.
The debt ratios are dependent upon different programs, but sometimes we’re not able to count that extra income from that part-time job. So that isn’t figured into your loan, but into your household it is. So we can do two different calculations, one with your actual real household income, take-home income, how much is your Starbucks?
How much is your Spotify? All those invisible bills that aren’t on the credit report. And then what’s the loan application going to do?
Because that’s your gross income or net if it’s self-employed, and then your credit report. So the numbers are two totally different aspects. So we like to go over both and make sure they’re comfortable with that payment because it’s two different calculations.
And sometimes people don’t know. They’re like, show me a house. You’re like, well, how much can you afford?
[Michelle Rene]
I don’t know. Yeah, so. Yeah, and so, I mean, I will help people, but it’s really thing one.
So if you, for someone out there looking and they wanna get the process started, I mean, yes, call me. I would love for you to, let’s at least get it on the radar of what you’re looking for. But this is the big question.
Are we looking at a $400,000 home or a 550 home? Yeah, so it’s a big difference.
[Leslea Williams]
And know, you know those car dealership psychologies. They, you know, or the model homes. You know, they have everything all staged and beautiful and all that stuff where they show you the expensive car first, and then you don’t want that one.
So don’t do that to yourself. Find out what you can afford, have realistic expectations so that you don’t get disappointed. Yeah, and have a plan.
Yeah, have a plan. Have a plan, have goals, have us.
[Michelle Rene]
Because we’ll help with all that. Okay, this is awesome. Thanks, great talk.
Did we miss anything? I don’t think so, no. And then how can people get in touch with you if they wanna get the process started?
[Leslea Williams]
So I will have her throw on a QR code for you guys. And thanks for watching. And we look forward to helping you get at home in Idaho.
[Michelle Rene]
Yay, that was a plug because the company name is At Home CDA, At Home Lending CDA, right? Mine is destinationliving.co. So everyone knows how to get in touch. And thanks so much, I appreciate the time.
Yeah, absolutely. All right, take care. Bye.
Bye.
About Leslea Williams
Leslea Williams began her Real Estate career in 2002 as a Retail Loan Officer and promoted to Business Development Account Executive where she oversaw the Southern California Region, trained associate Loan Officer and selected Mortgage Brokering in 2005. Leslea now owns a Mortgage Brokerage serving all of Idaho.
Leslea’s education and experience is extensive. She has achieved accreditation in Marketing, Finance, Management, Economic Trends, Fair Housing Trust Funds, Risk Management and Ethical Sales Practices. Leslea was rated among the top 1% of wholesale brokers among one of the nation’s leading Wholesale Lenders.
Leslea possesses strong morals, honest communication skills and will work very hard to help you to achieve your financial goals. You receive custom tailored loan analysis, one stop accommodates multiple rate shopping on your behalf. We offer more choices with a broad spectrum of loan products and the ability to offer more competitive pricing for our clientele. We work hard for you, so you don’t have to turn your loan process into a job for you! We understand this is the most important thing going on in your life, at that moment, and will be there to walk with you!
She is licensed with the Nationwide Mortgage Licensing System (NMLS) and the California Bureau of Real Estate.
Leslea Williams
Broker/Owner
NMLS #319522
