If you are a self employed borrower and have hard to document or show little income on paper there are mortgage programs for you that will allow financing up to 100% of the homes value!You can often use personal or business bank statements to prove your income. However, if you use business bank statements you will usually only be able to use 75% of that income to qualify.
Are you self-employed? Let us try an automated underwriting
system to get your loan approved. You may get approved
without having to provide tax returns. With an automated
underwriting approval, some lenders will not bump your rate up
for not providing tax returns.
Another way to qualify is with stated income. You state your
income on the application. Tax returns are not required.
If you have been self-employed for less than one year, a no doc
loan may be your answer. On your application, you do not
disclose your employment, income, or assets. You are approved
based on your credit history and equity in the property.
Providing bank statements is yet another way to qualify. Six to
twenty four months of bank statements are required. The lender
will average the deposits (and in some cases subtract a portion
for expenses) and use the average amount for your income. You
would use this method if you have a large amount of cash
flowing through your account.
As you can see, there are a lot of different ways for
self-employed people to qualify for a loan.
Often times a self-employed borrower will need a letter from a certified public accountant, to verify that they are self-employed. If you use a CPA to do your taxes, then this is generally not a big deal.
Stated income loans, no documntation loans, no ratio loans, and bank statement loans are great for self-employed and commissioned people. Many times documenting income can sometimes be tricky or hard to do for self-employed and these programs provide other options for you to prevent less hassle and paperwork. Many times you will have a little rate bump to your home loan due to providing less documentation for the increased risk to the bank, however it is well worth it.
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