Self-Employed Mortgage

The mortgage process for self-employed borrowers is like that of a regular salaried borrower. You will complete a loan application, provide documentation, and then your loan will go into underwriting for a final approval decision. The only main difference is that self-employed borrowers may be required to provide additional documentation to showcase their income.  It may be more irregular or volatile than a traditional salaried borrower.


Self-Employed Mortgage Requirements: How to Qualify

The following outlines information and documents you may need to provide for the mortgage lender to determine if you qualify for the loan.

Loan Requirements

  • Income
    • You must have proof of stable income
  • History of employment
    • Typically, you must be self-employed for at least 2 years to qualify for a self-employed mortgage program.
  • Credit history
    • Having a solid credit score may make it easier to qualify for a program.
  • Debt-to-income ratio

Documentation requirements

The documentation requested may vary depending on the type of business you own. Common documents include:

  • Two years of federal income tax returns (business and personal)
  • Profit and loss statement (if you are a small business owner)
  • Copy of the business license
  • Letter from your CPA stating you have been in the business for at least 2 years


Bank Statement Loans: Alternative Documentation Programs

Like freelancers or independent contractors, some borrowers may have more irregular income than others, making it difficult for them to qualify for the loan based on federal income tax returns and profit and loss statements. GuardHill offers a bank statement loan program that may make it easier for self-employed borrowers to purchase or refinance a primary home, second home, or investment property.

  • Program highlights
    • Borrower may qualify based on personal or business bank statements
      • No tax returns required!
    • Borrower may qualify based on multiple streams of income in addition to bank statements
      • W-2 income
      • Rental income
      • Retirement income
      • Social security income
    • Eligible for loans up to $3 Million
    • Minimum down payment of 20%


Mortgage Tips for Self-Employed Borrowers

Before applying for a self-employed mortgage program, you may want to focus on the following:

  • Lower your debt-to-income ratio
    If your ratio is on the higher end, you may want to focus on paying down some debts before applying for a mortgage. Borrowers with higher debt-to-income ratios are deemed riskier, which may lead to a higher interest rate.
  • Boost your credit score
    Although improving your credit score is not a quick fix, you may want to check up on your score before applying. If it’s not where it needs to be, focus on making timely monthly payments and avoid applying for new credit. Typically, higher credit scores may allow for more favorable loan terms.
  • Save up for a larger down payment
    Some self-employed mortgage programs may require a down payment of about 20%. Click here to learn more about tips on saving for a down payment!


Why Choose GuardHill?

GuardHill has over 29 years of mortgage financing experience and specializes in providing standard and out-of-the-box financing solutions for our customers. GuardHill works with numerous investors and lenders and offers various loan programs to provide borrowers with the best financing solutions possible.


Contact us today to get started!