Self Employed Mortgage Lenders for 2019 – Self Employed Mortgages
Best Self Employed Mortgage Lenders for 2019
If you are self employed and looking for a mortgage, you may already know that finding financing in the past was difficult. After the housing bubble burst, some of the mortgage programs for self employed individuals disappeared. The good news is there are some self employed mortgage lenders now that offer great programs for you.
Dream Home Financing is the hub for self employed mortgages and we are connected to the best self employed mortgage lenders who offer these programs. All you need to do is contact us and based upon your scenario and location, we will match you with the best lender to suit your needs.
If You are Self Employed and Cannot Document Your Income
For conventional loans that are Fannie Mae eligible, self employed borrowers will need to qualify based upon the net income reported on their tax returns. Look at your tax returns and see what your net income is. Are you taking a lot of legitimate business related tax deductions that are resulting in a very low net income or a loss? If so, then we can help connect you with a self employed mortgage lender.
If your net income on your tax returns seems to be high enough to qualify, then read below about how to qualify if you can document your income.
The requirements for a self employed mortgage:
- Self employed for a minimum of 2 years
- Can show a flow of money coming into your bank accounts for 12-24 months.
- The cash flow into your bank accounts will be used as income on your mortgage application.
- Credit scores can be as low as in the 500’s
- Business license if applicable
We can help answer any questions you may have or discuss your scenario if you are interested in finding out more. You can complete the quick contact form or call us at 732-761-9040
If you are self employed less than two years and cannot meet the requirements above, we can still help you to get a self employed home loan. If you are looking for a mortgage with seasonal income, this is also a great options since the bank deposits are averaged over the year. The bottom line is if other lenders have denied you in the past, don’t give up and let us try to help you.
Pros and Cons of a Self Employed Mortgage
- No tax returns needed
- Low down payment as little as 10%
- Your business can be losing money and you may still qualify
- There are options for people who just started in business
- Credit score requirements are lenient.
- You will need a minimum of 12-24 months bank statements
- There are no zero down programs available
- Interest rates will be slightly higher than if you can fully document your income.
Credit Score Requirements for a Self Employed Mortgage
The credit score requirements for a self employed mortgage may vary by lender. However, there are a handful of self employed mortgage lenders who will allow for credit scores as low as 500. Credit scores are an important factor for lenders when it comes to approving the mortgage and even assigning an interest rate. You should do whatever you can to improve your credit score.
Self Employed Mortgage Programs
The following programs are the most common for self employed borrowers who cannot document their income.
Bank Statement Loans – These programs ask that you provide 12-24 months of your business and or personal bank statements. They want to see steady deposits (income) flowing into your bank accounts. This will be the basis for how you will be approved for the self employed mortgage. No tax returns will be required.
One Year Tax Return Mortgage – The one year tax return mortgage is also for self employed borrowers. This program will help those who may have only been in business for 1 year and can qualify based upon the net income on their tax returns.
Self Employed Mortgage Lenders
There are a few lenders who have self employed mortgages but the problem is their guidelines may change often. It is not easy to keep on top of which lender is right for you. The best self employed lender may not even be ranking that high in a google search so how will you find them?
We are connected to the various lenders who offer special mortgage programs for self employed individuals. Some of these lenders are listed below and others are not. The guidelines change constantly. Let us help you to determine which is best for you.
Self Employed Mortgage Lenders
How to Prepare Yourself in Advance for a Self Employed Mortgage
Consider taking the following steps well in advance of applying for a loan if you are self employed:
- Make sure that your credit score is a high as possible. There is no specific credit score requirement, but it helps with your down payment requirement and will impact your interest rate.
- Save for a 10%-15% down payment. This will be the minimum that will be required by self employed mortgage lenders.
- Deposit all business income into your bank accounts. Self employed lenders will be asking you for 12-24 months of bank statements so they can see your deposits. These deposits will be used as your income on your mortgage application. Therefore, even if you get paid in cash you should begin depositing it into your accounts.
- Speak with a self employed mortgage lender early. Even if you are just thinking about buying a home or refinancing it is a good idea to have conversations with a lender early. Let us help you to get connected to a reputable lender who can answer all of your initial questions and give you an idea as to whether you qualify and what your rate could be.
If You are Self Employed and Can Document Your income
Many people can qualify for a mortgage using their tax returns because their net income is high enough. If that is the case for you, then here are just a few of your mortgage options. We can help you here as well.
Income Documentation – You will need to provide 1-2 years tax returns and possibly a current year P&L statement from your accountant. You will also need to prove that you have been in business by providing a business listing, a business license, and/or a letter from your accountant verifying how long you have been in business.
Popular Mortgage Options For Those Who Can Document Their Income
- FHA Self Employed Mortgage – For an FHA loan, you will need to fully document your income. You cannot qualify using bank statements. Therefore, you also would follow the basic FHA guidelines that are set for everyone. There are no bank statement FHA loans. Click to read more about FHA home loans. Or you can get connected with us and we will take you through all options.
- VA Self Employed Mortgage – If you are a business owner and a veteran or active military, you can qualify for a VA loan. You will also need to qualify based upon the net income on your tax returns. There are no bank statement VA loan programs. Click to read more about VA home loans for self employed.
- USDA Self Employed Mortgage – Do you live in a rural area? If so and you can fully document your income, then consider a USDA loan. There is no down payment requirement and also no PMI. Click to read more about USDA home loans for self employed.
- Conventional mortgages for self employed – Typically, conventional mortgages required that you fully document your income and qualify the same way that W2 wage earners do. If you can document your income then you are in good shape. If not, then the bank statement loan is what you need. If you are only able to document your income but just for one year, then we have an option for you there as well.
- No Tax Return Mortgage – This is very similar to a bank statement loan. No tax returns are used for qualification purposes.
Self Employed Mortgage Related Questions
How long do you have to be self employed to get a mortgage?
Typically two years will be the minimum. However, there are options now for those who have just started their business and do not have a two year history.
Is it harder to get a mortgage if you are self employed?
It can be harder if you do not have the bank statements or enough money flowing into those statements to qualify. The real difference will come down to what the terms of your mortgage will be.
Are there still no income verification loans?
Yes, there are and they come in many different forms. Depending upon your personal situation, the options may be different. Let us help you to figure out what the best options are for you.
How do you qualify for are self employed mortgage?
If you can document your income, then you will qualify the same as W2 wage earners. If you cannot document your income then you are most likely going to qualify with a bank statement loan. We work with quite a few lenders who specialize in bank statement loans for self employed borrowers.
Where can I find self employed mortgage lenders?
These lenders are not always easy to find and they all have different guidelines. For example, some will require a larger down payment than others. Some only do business in certain states. Others require only 12 months of bank statements. These self employed mortgage lenders are not your local bank like Wells Fargo or Bank of America. Instead, they are specialized lenders that are not easy to find. This is why you should let us connect you with the one that makes the most sense based upon your scenario.
Are self employed mortgage lenders reliable?
They are absolutely reliable. These are not lenders that have a brick and mortar building in every town and they are not a traditional bank where you can keep deposits and have a safe deposit box. These are lenders who specialize in mortgages, are government approved, and have creative programs that your local bank does not have. If you are self employed and cannot document your income then one of these specialty lenders is who we will connect you with.
What kind of professions qualify for a self employed mortgage?
The most common professions are realtors, contractors, restaurant owners, massage therapists, plumbers, electricians, attorneys, masons, store owners, and more. If you are in business for yourself for a minimum of two years and have sufficient bank deposits, then you can get a mortgage.
Are there cash out refinance mortgages for self employed?
Yes, you can absolutely cash out but the maximum loan to value ration will vary based upon the loan program and also whether you can document your income.
Where can I find a self employed mortgage advisor? We like to think if ourselves as the place for mortgage advice for all borrowers.
Can you get a mortgage with just one year of tax returns?
Yes, there are programs for just one year of tax returns. There are just a few self employed mortgage lenders who offer that program.
We are able to help you to find a self employed mortgage lender in the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.