Self Employed and you want to get a home loan? What is the next step?
Let’s talk about Bank Statement Loans
You’re self employed and you want to get a home loan. What’s the next step? What documentation will be accepted? What sort of credit is required, what down payment is needed and all those things? Who can benefit from the bank statement program? The answer: Self employed borrowers, independent contractors, seasonal workers and freelancers.
I have the income and net worth, I just don’t have the documents!
Normally, mortgage lenders ask you for a lot of documentation, W2’s, pay stubs and so forth. If you are self employed and prepare your own taxes you may not have all the required documentation. Maybe you're a smaller one or two person business and you haven't used a CPA for the last two plus years. You may not have the paperwork to qualify for a conventional mortgage.
Maybe you work for a company as a W-2 employee and are just starting your own business. You're a salaried worker, but each year you're doing more and more self employment. Again, you may not have the paperwork to support your income scenario and you're not able to purchase a home.
Maybe you’re a software engineer and contract for three to six months from company to company. At the end of the year you receive a lump sum contract payment. Maybe you have a landscaping business or you have another seasonal type work. You may not show a regular weekly income stream. Maybe you're delayed in filing your taxes for the last two years and don’t have returns to show. That doesn't mean you're not qualified for a mortgage.
There is a solution
At Landmark, our underwriting team will work with you. We will review your last two years of bank statements to see that yes, the seasonality is normal for your line of business. We take the time to understand your situation to be able to demonstrate to lenders that your income and deposits will support that mortgage. Based on our careful review, we will let you know if we can change “No” to “Yes” based on 12 to 24 months of statements.
What are the advantages?
We make it easy: No tax returns, supporting schedules, CPA letters and all that tax documentation. We're going to look at your bank statements and the type of business you’re in to see what kind of loan limits we can qualify you for.
We give you options: We have extensive wholesale lender relationships developed over 20 years. Those relationships give us the ability to seek exceptions to credit score, debt to income and other requirements if needed.
Conserve your liquidity: We arrange financing up to 90% of the purchase price for what that property is worth. Many times, self employed people feel they need a very large down payment of 20, 30 or 40% down to qualify. That's not the case. The average is anywhere from 10 to 20% down for a new home purchase or a refinance.
Back to Basics - What do you need to qualify?
You have to be self employed for at least two years. We can verify that in many ways. Sometimes just a license or an insurance policy or Articles of Incorporation is needed. Maybe you run a daycare out of your home and had to take out a special special policy. We can use that.
Credit: You can qualify with a FICO score are as low as 660
Debt to Income: Lenders typically want to see that your taxes, insurance and mortgage payment are 45% or less of what our average deposit is. We work closely with underwriters at mortgage companies and banks that keep these loans on their own books instead of selling them through Fannie Mae or Freddie Mac. As a result, we can obtain underwriting exceptions depending on credit score and other assets that you have.
Basically, bank statement loans are ideal for self employed borrowers.
Our underwriters and processors do the up front work of qualifying you so we have a high degree of confidence we can obtain the financing you need. You don't have to have perfect credit. You don't have to have 20, 30 40% down. Your debt to income doesn't need to be extremely low. We will look at your situation to help you qualify for a loan on a primary home, second home, condo or townhome.
Applying for a loan or getting more information is easy.
Call or email us to set up a time to meet by phone: avi@landmarkfg.com 718-773-4000
