Qualifying for a home loan as a self-employed individual is getting easier and not a difficult as it used to be. Most loans for self-employed borrowers require the borrower to be self-employed for two years. Some loans also require the borrower to provide two years of tax returns to verify income but we have a number of lenders that only require one year of tax returns.
How to Be Considered a Self-Employed Borrower for a Loan?
With the natural fluctuating income of a self-employed individual the lender wants to make sure the income they use to qualify is sufficient and likely to continue.
The Fannie Mae guidelines will require you provide 2 years of tax returns to calculate your income and in some circumstances of highly fluctuating income additional documentation might be required to understand the continuity of income.
Freddie Mac might only require 1 year of tax returns to verify income even though you still have to prove you have been self-employed for at least 2 years.
VA Loans in most cases require two years of tax returns and self-employment but can be much more flexible for veterans and can make exception that Fannie Mae, Freddie Mac and the FHA will not consider.
Non-qualified (Non-QM) mortgage lenders and their mortgage products will still require a 2 years history of self-employment but qualify borrowers based on 12 or 24 months of bank statement deposits which may be less restrictive than Fannie, Freddie, VA or FHA.
Large fluctuations or very irregular income may require additional documentation.
We Can Help Determine If You Can Buy a Home With Steady Or Uneven Income and are happy to walk you through all of your borrowing options.
Get In Touch With Your Mortgage Specialist Today!
Blue Square Mortgage has helped many self-employed borrowers in Washington State and Colorado to apply successfully for mortgages, even with fluctuating income. We can walk you through what you need in terms of documentation and justifications when you apply for a home loan. If you are ready to get started, please call us today at (206) 352-6453 to schedule your consult.
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