As more and more people today are starting their businesses or are taking on freelance work, mortgages for self-employed borrowers are becoming increasingly popular. Just because you may own a business or work as a freelancer does not mean you cannot own a home! Although it may be more challenging for self-employed borrowers to qualify or get approved for a mortgage, GuardHill focuses on providing solutions for borrowers with unique or non-traditional income sources. Our goal is to help make homeownership more obtainable to borrowers with varying financial profiles.
How to Get a Mortgage When Self-Employed
Typically, the mortgage process for a self-employed borrower 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. Below, we outline the mortgage programs we offer for self-employed borrowers, the typical mortgage requirements for these programs, and how they may differ from traditional loan programs.
What are the Typical Self-Employed Mortgage Requirements?
One of the biggest challenges a borrower faces is how to prove income when self-employed since many have varying or inconsistent monthly or annual income. Thus, the mortgage lender will review your income and credit documents to ensure your employment and revenue are stable and to determine your ability to repay the loan based on how you have handled debt in the past. Typically, the lender will review the following factors to evaluate the risk associated with qualifying you for a self-employed loan program:
- Stable income
- History of at least two years being self-employed
- Strong credit score
- Lower debt-to-income ratio
The lender may also request the following documentation:
- 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 two years
The documentation requested may vary depending on the type of business you own.
How to Qualify with Alternative Documentation – Bank Statement Loans for Self-Employed Borrowers
Some borrowers may have more irregular income than others, making it more 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.
Bank Statement Loan Program Highlights:
Why GuardHill is one of the Best Mortgage Lenders for Self-Employed Borrowers
With over 28 years of mortgage financing experience, GuardHill has helped borrowers achieve their financing goals with varying financial and credit profiles. We work with numerous investors and lenders to custom-tailor loan programs to the borrower’s unique scenario.
We are well versed in the self-employed financing space and understand the lending guidelines to help you achieve your financing goals faster than the competition.