Self-Employed Mortgage Loans

Nickel City Funding in Orchard Park, NY has helped a diverse array of buyers secure a home. This week, we are here to talk about a unique type of mortgage for people with non-traditional sources of income. This program is often referred to as a “Self-employed loan.” Recent loan guidelines aim to simplify the process for homebuyers who are entrepreneurial and maintain their own source of income. Read on below for helpful hints about self-employed loans.

Applying for a Self-employed Mortgage Loan

Initially, the steps to apply for a self-employed loan are very similar to applying for a traditional loan. You will submit an application, and document all sources of income, retirement, savings, investments, and debts. Your credit and employment history will also be checked. This information is usually processed by a computerized application system, which can approve you. After this, someone will check your sources of information. The system may also reject or delay the outcome if it detects unusual circumstances. At this point, a human will take over the process and typically perform manual underwriting for your loan.

Lenders will look for your sources of taxable income, primarily. They will also aim to thoroughly review and qualify self-employed sources of revenue. A bank is usually looking for a stable and ongoing source of income, which could cause issues if you are seasonally or intermittently collecting funds from your employment.

Documentation for Self-employed Loans

At a certain point, additional proof of your worth and ability to repay a loan will come from other documentation. Many lenders will want to review the assets you have. Most define someone as self-employed when they show 25% or more of ownership in a business. There is a variety of ways to show your assets, including the following:

  • Your tax return statements.
  • Information showing the stability of the business you own, including its purpose and location.
  • Information showing the nature of your business is in demand.
  • The profit and loss statements of your business.
  • Documentation showing the stability of your income.

If you opened your business fairly recently, then additional probing of your history may be needed. It is helpful if you can show that you have a fair amount of experience and success related to the business that you currently own in your previous employment.

Finding the Right Lender

Finding the right lender to work with will be important in your quest to secure a self-employed loan. You can ask to see if lenders have experience and success with a similar borrower. You can also check if the software that they use to approve loans will be useful in producing accurate research to qualify your loan.

When it comes to self-employed loans, you will want to work with someone who has experience. Nickel City Funding in Orchard Park, NY wants to help address your questions. Call us today to get started!