Are you self-employed and want to get a mortgage loan, either purchasing a home or refinancing a loan? This short message is for you.
With COVID creating a problem with the economy, most lenders and investors have added a bunch of additional rules. They sort of dig into the current money that you’re making a little bit more than they did in the past. In the past they would go more off of tax returns and maybe a profit and loss statement. Now bank statements have become involved. But they’re starting to soften those rules, and we’ve done A LOT of self-employed loans over the last year and a half. So we’re happy to chat with self-employed people to go over what the current rules are.
Also, here’s one definition of self-employed that a lot of people don’t know. Oftentimes people think they’re self-employed when they may not be. Sometimes when people make commission they think, “I’m going to be considered self-employed in every way.” That’s not necessarily true.
The definition of self-employed on a conventional loan is that you own 25% or more of the business that you want to count income from in order to get the loan. That’s the strict definition of self-employed — that you’re an owner of 25% or more. And that’s where the rules get the tightest.
There are times where we run the file, we get your application, we run it through these conventional underwriting systems and they only ask for one year of tax returns, and maybe some profit and loss statements. So, yes- they delve into your business a little bit, but it may not be as bad as you think. So if you’re self-employed, please give us a call! We’d love to help you out!
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