Self-Employed Loans: The Ultimate Guide to Getting a Mortgage When Your Self Employed Hey there! Alex MacLagan the Mortgage Doctor. As a self-employed mortgage broker, I know firsthand how hard it can be for entrepreneurs and freelancers to get approved for home loans needing only tax returns or pay stubs. Verify my mortgage eligibility (Feb 24th, 2024) That’s why today I’ll be focusing on specialized mortgage programs called self-employed loans – designed for borrowers just like you! Specifically, we’ll cover: What self-employed/bank statement loans are Why they help self-employed borrowers What key options and requirements exist Let’s do this! Time to unlock financing approval when self-employed! Verify my mortgage eligibility (Feb 24th, 2024) Table of Contents Toggle Self-Employed Loans ExplainedWhy Self-Employed Loans WorkKey Self-Employed Loan TypesBank Statement LoansAsset Depletion LoansProfit & Loss LoansReady to Apply for a Self-Employed Mortgage? Self-Employed Loans Explained Self-employed loans allow underwriting using bank statements rather than tax returns or pay stubs. This also makes them called bank statement loans. The key options include: Verify my mortgage eligibility (Feb 24th, 2024) Bank statement loans – uses personal bank statement deposits Asset depletion loans – uses asset balances being spent down Profit & loss loans – uses P&L statement revenue/expenses So in short, self-employed loans open up mortgage approval to borrowers that may not qualify through traditional channels like FHA loans, VA loans, or conventional loans. Making them an ideal fit for: Self-employed borrowers Business owners 1099 & contract workers Who don’t have W-2s or enough tax return income to prove eligibility otherwise. Verify my mortgage eligibility (Feb 24th, 2024) Why Self-Employed Loans Work These programs analyze your bank statement deposits rather than tax return income or pay stub wages to underwrite. This helps in cases where your tax returns: Show limited or inconsistent income Don’t reflect current earnings potential Have expenses lowering your net profit For example – as a rideshare driver you may deposit $5k/month consistently. But tax write-offs lower your return income, so deposits demonstrate earning ability better. Verify my mortgage eligibility (Feb 24th, 2024) Bank statement loans would help approve based on those deposits! Resulting in easier qualification for mortgages when self-employed! 🙌 Self-employed loans can mean celebrating that hard-to-get approval! Key Self-Employed Loan Types Now that you know why these loans help, let’s overview some of the top specific offerings I can provide for self-employed borrowers: Verify my mortgage eligibility (Feb 24th, 2024) Bank Statement Loans These allow qualifying using the deposits shown on your bank statements. You can submit your personal or business bank statements Requirements: Minimum 620 credit score Down payments as low as 15% 12 or 24 months of personal or business bank statements Statements evidencing consistent deposits Upsides Verify my mortgage eligibility (Feb 24th, 2024) Simple eligibility analysis No tax returns or pay stubs needed Uses actual deposited income Downsides Higher rates than conventional loans The expense ratio can be as high as 50% (This will lower your income by this percentage) Asset Depletion Loans Asset depletion loans use the value of your liquid assets, such as savings, stocks, bonds, etc to calculate your gross monthly income. This way you do not need to use tax returns or pay stubs for your income. Requirements: Verify my mortgage eligibility (Feb 24th, 2024) 24 months of asset statements No requirement for minimum remaining reserves Upsides Allows even very inconsistent income Best option for some business models Downsides Requires substantial starting reserves to deplete Higher rates than conventional loans Profit & Loss Loans These loans look at the revenue and expenses on your business Profit and Loss Statements. Verify my mortgage eligibility (Feb 24th, 2024) Requirements: 12 or 24 months of P&L docs CPA-prepared reports hold more weight Upsides Uses real-time revenue data Helps rapidly growing businesses Downsides Verify my mortgage eligibility (Feb 24th, 2024) Still scrutinizes business performance Expenses can muddy approval ability Ready to Apply for a Self-Employed Mortgage? Hopefully this clarified why bank statement loans can be ideal for qualifying when self-employed – plus your unique options. Just remember key benefits like analyzing deposits rather than returns or pay stubs. And the flexible requirements around using statements from personal or business accounts. Verify my mortgage eligibility (Feb 24th, 2024) For expert guidance selecting the optimal path for your unique financials, connect with me directly! I can run the numbers and rates on custom self-employed loan packages tailored to your needs. Time to take that first step toward finally getting approved! Reach out and let’s chat! Show me today's rates (Feb 24th, 2024) asset depletion loans bank statement loans profit and loss loans self-employed loans Alex MacLagan Mortgage Broker Click to Call or Text: (847) 899-6882 This entry has 0 replies Comments are closed.