Mortgage Loans for Self Employed Palm Beach Gardens, West Palm Beach FL.

Being your own boss comes with many perks. However, easy mortgage approval may not be one of them. If you are a self-employed home loan applicant, you need to meet certain criteria which a salaried person may not have to. The regulations about how it works have been recently updated which will take an even closer look at your business, income, and credit score. So, let us review the new rules for self-employed professionals applying for a home loan for the first time, as well as for those who’ll be impacted by the new rules the next time they apply for a loan.

Recent changes have made it easier.

The Guidelines for self-employed borrowers have slightly loosened. Unlike in prior years, you may now only need one year of income tax documents as a proof of your income if your application qualifies for automated underwriting.

Another highlight is a documentation reduction from two years of federal income tax returns to one in some cases. The new mortgage loan guidelines are also friendly towards "moonlighters."

A borrower with a self-employment income from a second business (non-salaried) does not need to document this income if he/she qualifies for the loan based on the income that comes from their first business.

Mortgage approval

When buying a house or refinancing, a self-employed applicant must follow a certain set of steps.

First, you have to apply for the loan. Usually, the loan officer/processor takes your personal details and other relevant information verbally to submit it to an Automated Underwriting System (AUS). Filling out dozens of complex forms right from the start is not required anymore.

You will also have to document your current income, plus retirement, savings, investment balances, as well as your debts. Lenders want to have a thorough look at your complete employment history and will also check your credit.