Self Employed and Need a Mortgage? No Problem!

Big bonus of self-employment: You’re your own boss! A challenge: Proving that you have the financial stability needed to get a mortgage loan.

I’m here to tell you today that it IS possible for you to get a loan. There are just a few extra steps you may need to take before you’re off shopping for a new home with a pre-approval in hand.
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Here’s What We Take A Look At

A self-employed borrower is any individual who has 25% or greater ownership interest in a business. According to Fannie Mae, underwriters consider the following factors to approve a self-employed borrower.

  • The stability of the borrower’s income
  • The location and nature of the borrower’s business
  • The demand for the product or service
  • The financial strength of the business
  • The future outlook of the business

Stability and Consistency

Financial stability is usually measured by looking back at least two years in financial records. For some self-employed individuals, this may not be possible if you just started your business within the last year. In this case, we will look at your previous employment to determine if it was in similar to the scope or nature of the business you currently own. If it is, we can use the past employment and income together with your current self-employment records. If not, we may need to wait longer or find other ways to verify your financial stability.

Strength in Numbers

Be sure as a self-employed individual that you keep up with a monthly profit and loss statement. This is the most accurate way of keeping numbers current and showing the strength of your business. When it comes time for tax reporting, only income that shows on your records will count toward your buying power for a mortgage.

Be Willing to Share the Details

Going independent can be challenging in many ways. We’re here to help make sure getting a mortgage isn’t on your “trouble” list. When you’re ready to meet with me to discuss your finances and your home buying goals, be sure to have an outline ready of your income and debts for the past 2+ years. If there are significant changes in your income during that period of time, let’s talk about why that is. Explanations and details matter!

I look forward to working with you soon!

Sources: Fannie Mae, The Mortgage Reports, & BizTimes

Skyline Financial Corp. and its loan officers are not tax advisors. Always consult a tax professional for details.

The information contained in this blog has been prepared by an independent third party and is distributed to consumers for educational purposes only. The information is considered reliable but not guaranteed to be accurate. The opinions expressed in this article do not represent the opinions of Skyline Home Loans. This is designed to give helpful tips and is not intended to give legal advice. This is not a prequalification, preapproval, loan approval or commitment to lend.

8blocks has a business relationship with Skyline Financial Corp. (“Skyline”). 8blocks creates co-branded websites for Skyline and Aria Hangval. Skyline and Aria Hangval compensate 8blocks for this service. You are not required to use Skyline or Aria Hangval’s services as a condition to the purchase or sale of a home or other property. There are other mortgage lenders that may be able to offer you a mortgage loan. You are free to shop around to determine that you are receiving the mortgage rates and terms that fit your needs. Your choice of a mortgage lender or realtor will not affect current or future services and products provided to you by these unaffiliated entities.

Skyline Financial Corp. is not affiliated with Aria Hangval or their brokerage. Each is solely responsible for the products and services it offers.

Skyline Financial Corp. dba Skyline Home Loans, Nationwide Mortgage Licensing System (NMLS) Company ID# 12072. Arizona Mortgage Banker License #927740, Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act File No: 4130296, Georgia Residential Mortgage Licensee, Illinois Residential Mortgage Licensee, Licensed by the New Hampshire Banking Department License #19536-MB, Ohio Broker/Banker Registration #MBMB-850231-000, Oregon Mortgage Lender License ML-2797, Washington Consumer Loan Company License CL-12072. Refer to www.nmlsconsumer.org and input NMLS#12072 to see where Skyline Financial Corp. is a licensed lender.