While it may be true that underwriting guidelines used by some lenders make it difficult for self-employed borrowers to get a mortgage, working with the right mortgage broker can make a huge difference. The mortgage specialists at MortgageDepot have the following tips for self-employed borrowers in need of mortgage financing.

Showing a consistent stream of income

Lenders look the ability of a borrower to generate consistent and stable income. Someone working as an hourly or salaried employee need only produce a W-2 and tax returns to prove income. For the self-employed owner of a business, proving income may be accomplished by providing a lender with the following documentation:

  • Year-to-date profit and loss statement.
  • At least two years of federal income tax returns.
  • Bank statements for at least two years for business and personal accounts.
  • 1099s generated by income sources.

Some lenders may also require copies of personal income tax returns and a letter from the self-employed borrower’s accountant to explain income fluctuations from one year to another. Other sources of income, such as rental properties and investments, may be useful to establish sufficient income to satisfy a lender’s underwriting guidelines.

Proving stability

When someone who is self-employed comes to MortgageDepot for financing, one of the first things we look at is the length of time the person has been in the same line of work. For example, a borrower in business for less than two years may be able to present the stability a lender wants to see by showing employment in the same field or line of work as a W-2 employee for several years.

Help for self-employed borrowers

Our experience as one of the leading mortgage broker companies allows us to work with a large network of lenders to offer financing options to self-employed borrowers.

For more information and to contact one of our loan officers, visit us at MortgageDepot.com.

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