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.
Other Documents Required
Lenders look at all your assets to ensure that the loan down payment is coming from a legally acceptable source. They also want to ensure that you do not have any undisclosed loans. If your bank account history shows an unusually large deposit made by you in the last sixty days, you may be asked to confirm the source of that money.
Depending on the lender, you may also have to submit other documents such as your business license or a statement from your accountant.
If you are a self-employed professional and want to apply for a home mortgage loan in West Palm Beach, FL, contact My Liberty Loans today. To learn about the various loan programs they provide, visit https://www.mylibertyloans.com/. You can also reach them at (561) 799-4015 during regular business hours.
