Mortgages for the Self Employed

With everything that has transpired with the sub-prime mortgage crisis, lenders are not so swift to hand out loans to just anybody any longer. This means that if you’re self employed it has become much more difficult to secure a mortgage than in the recent past. This being said, it is not impossible. You’ll need to work hard to obtain a solid loan application with a good lender.

Understand first that as someone who is self employed not all lenders will see you as an ideal borrower. You may have to expect to pay higher interest rates and find you have less ability to shop around for the ideal rate. In other words, your choices may be limited. In some cases lenders may demand a lower loan-to-value-ratio and in this case you’ll have to come up with a larger down payment.

You’ll want to work face to face with a loan officer or a mortgage underwriter to get things moving on your loan. Although online resources are great, starting locally and with an actual person will tend to yield the best results for self employed persons seeking a mortgage.

Being in the tough situation you’re in, take note that you’ll have to be doubly organized with your records. In most cases you’ll need at least the past two year’s tax returns, several months of business and personal bank account statements, two forms of identification, alongside a copy of your business license. Be sure to photocopy everything and keep your originals.






Alongside all this financial documentation you’ll also need to present your housing or rental payment history. As a renter you’ll need to show your monthly cancelled rent checks or alternately you can provide a statement from your landlord. If you already own a house than in most cases your credit history should be sufficient.

These days you must prove without a shadow of a doubt your total income. Verification is standard and you’ll need to show at least one month’s worth of receipts to show your income, as well as your tax returns.

You’ll want to keep on top of your loan officer and follow up with all paperwork requests. If you can present all that is requested of you, and can prove your eligibility than you may be on your way to a self employed mortgage loan.

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Mortgages for the Self Employed / Author: Ted Guarnero