Self-Employed Home Loan Financing from American Financial Resources

With the disappearance of many no documentation loan programs, some self-employed individuals are concerned they will no longer qualify for a mortgage if they must apply for a full documentation mortgage. At American Financial Resources we have lots of great home loan options for the self-employed, and expert mortgage consultants who can advise you throughout the process.

What is involved with getting a mortgage for someone who is self-employed?

If you are self-employed applying for and getting approved for a home loan will follow generally the same mortgage process as for someone working for an employer, but instead of documenting your income with a W-2 and a recent paystub there will be a little more paperwork involved. You will likely be asked to provide copies of some of the following items, and possibly additional items if your situation warrants it:

• 2 years tax returns
• your business license
• a letter from your accountant
• a balance sheet and profit & loss statement for your business

Those who have been self employed for two years or more will most likely have an easier time getting approved, but that does not mean you will not qualify simply because you went into business for yourself six months ago. As with any other mortgage, lenders take many factors into account - employment is just one of them. Others include your credit report and score which shows your history of repaying debt, equity in the home, and the amounts of your assets and liabilities. If you are a good borrowing candidate based on these other factors you will likely stack the deck in your favor.

Tax Liability vs. Mortgage Financing

When you are self-employed it's important to think about your ability to take out a loan not just when you want to buy a home, but also at tax time. The self-employed borrowers who generally run into problems are those who write off a large portion of their income as business expenses in order to decrease their tax burden. This can come back to haunt them when applying for a mortgage because their income looks much lower than it actually is on the only form most lenders can use to document it - tax returns.

To learn more about current rates for mortgages for the self-employed, and what you might qualify to borrow, give us a call at 800-316-9508 or request a quote through the form on this page. You can also get started online.