There are many programs available to people who are self-employed. If your credit score is good enough, the lender wont need to verify your income at all.How long have you been self employed and how can you prove it? The rule of thumb is that you need to have been self employed for 2 years and need to have tax returns, an accountant letter, or business license to prove it. If you have been self employed for less than 2 years be sure to let your mortgage professional know this upfront as there are also low or no documentation programs that may work for you.
Often self employed loans can be easier then loans for W2 employees. Self employed loans require you work with a professional that is familiar with several lending options. If you call me we can discuss how we can help. I can be reached at 888-275-6788. Or you can email me at info@luxuryhomeloans.net.
Even if you are self employed and don't document all of your income in a conventional manner, you may still qualify for a "full documentation" program. This is done by providing either 12 or 24 months of bank statements as income documentation. Banks will typically look at 100% of gross deposits (ignoring withdrawals) for a personal account or 75% of gross deposits for a business account. Going "full doc", in many instances, can help you to qualify for a lower rate than a "stated" or "no documentation" loan.
Loans for the self employed also require the self employed person or business owner to provide proof of their self employment. This often involves providing a business license. If you are unable to provide a business license, call 888-275-6788 to discuss alternative documentation which may be acceptable to help you qualify for a self employed or business owner refinance.
Self-Employed people with excellent credit and asset reserves can often get approved via an automated underwriting system with little income documentation. Often the rates are comparable to a full documentation loan. Consult your mortgage professional for details.
People who are self-employed may believe that they cannot get a loan. This is not true. This belief comes from people thinking that the lender has to have proof of the source of your income. There are loan programs that do not have this requirement. Contact a mortgage broker to help find a loan for you.
You can get full document loan rates if you are self employed and you declare your income. Remember, its your bottom line income after deductions that counts.
Loan programs such as Stated Income or No Documentation loans are available to those self-employed individuals who qualify.
Stated Income loans will allow you to "state" your monthly income without verification of the amount. The lender will verify that you are self-employed through your accountant or book keeper. The lender will typically require that your accountant or book keeper write a letter stating that you have been self-employed for no less than 2 years.
The No Documentation loan is similar to the Stated Income program, but the borrower does not need to provide any documentation whatsoever in regards to income, employment, and assets.
When using a stated income loan and you are stating your income on the loan application be aware that you are not supposed to lie about what your income actually is. With self-employed borrowers, many times it is hard to provide all of the income documentation required for a mortgage loan, and for a very small rate increase you can alleviate the headache of trying to get all of this documentation together and just simply state how much money you make. If you are stating an income on your application that an underwriter does not feel is consistent with what you do for a living then the underwriter may still require income documentation at their own discretion.
Self employed people used to have a difficult time obtaining financing for homes. Today there are various programs custom tailored to the specific needs of the self employed borrower. Whether there is fluctuating income or cash reserves in savings, just know that there are solutions available to you.
Besides different types of documentation for self employed individuals. There are some types of mortgages that are specifically designed for self employed people. One example would be a Pay Option ARM. These loans offer flexible payment options, which is usually an advantage for the self employed who have variable income.
Often times filling out a 4506-T tax form is required for self employed borrowers.
