Qualifying For A Mortgage When Self-Employed

Video on Qualifying For A Mortgage When Self-Employed

This video explains qualifying for a mortgage when self-employed. Job history for the past two years is a requirement. Your net income needs to show enough income to qualify for the mortgage payment. FICO scores need to range from 580 and up.

Mortgage Options

We offer a 12-month or a 24-month bank statement program, which is a Non-QM loan program. What is the difference?

For borrowers who are just starting out in their business and did not make a lot of money in their first years, we normally use the 24-month bank statement program. This allows borrowers to average out their net income over a 24-month period, which in turn increases their qualifying monthly income.

Do not worry about whether you need the 12-month or 24-month bank statement program — we will determine this for you when calculating the necessary income requirements.

Can You Show Plenty of Income?

For borrowers who can show plenty of income, you won't need the Non-QM loan products. Instead, you can qualify for a traditional Conforming, FHA, VA, USDA, or Jumbo loan program.

Requirements for traditional programs:

• Continuously employed in the same field for the last two years
• Filed business tax returns for the last two years (must be filed on time)
• If you have a filing extension, you will need your extension letter

Rates on any of these traditional loan products are more favorable compared to the Non-QM bank statement program, so qualifying conventionally is the preferred path when your income supports it.