Buyer Financing: Self-Employed Buyer

Dated: December 7 2021

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 SelfEmployedBuyer

For the Self-Employed Buyer: What You Need to Apply for a Mortgage

The self-employed sometimes can’t predict their monthly income. But the self-employed can certainly qualify for a mortgage, and the best way to do this is to be ultra-prepared. What do you need?

  1. Tax returns for the past 2 years

Lenders will want to check out your income history with your tax returns to calculate an estimated average monthly income.

  1. Profit and Loss Statement

They will want to see a profit and loss (P&L) statement. This shows the lender how much money your business makes and how much it spends.

  1. A Good DTI Ratio

Your debt to income (DTI) ratio is a figure that lenders rely on when evaluating whether or not you can afford a mortgage. For self-employed borrowers, the DTI maximums will most likely need to be lower than a W-2 employee at 43%, as you’re a higher-risk applicant.

  1. A Good Credit Score

Do you make regular, on-time payments? Do you refrain from taking out more debt than you can afford? Do you use credit consistently but not carelessly? These are all things that lenders want to know and your credit score is the easiest way to answer those questions. You’ll qualify for a competitive interest rate if you have a high credit score. 

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Courtney Silverman

• I KNOW RESIDENTIAL REAL ESTATE • Full-time top producing Real Estate Professional 17 yrs+ • The process will be easy and stress-free • Marketing, Negotiating skills, Competence & Ethical sta....

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