Mortgages Designed For Self-Employed Borrowers

The requirements for a self-employed mortgage will depend on whether you are qualifying conventionally (with tax returns) or unconventionally (without tax returns).

Self-employed conventional mortgage qualifications include:

• FICO score of 620 or greater
• Debt to income ratio of no more than 50%, based on the net income reported on the last 2 years of tax returns
• Down payment of at least 3%
• 2-year history of being self-employed (shorter periods of one year are considered on an exception basis)
• Year-to-date profit & loss statement, balance sheet, and recent bank statements to support income

Most lenders do not analyze and underwrite a borrower's income up front (at the pre-approval stage).  Did you know that most loan officers are given authority to issue you a pre-approval letter without your loan ever being underwritten, and that your loan could later be denied by the underwriter? 

Online approvals are even more dangerous. If you enter your income (at least what you think it is) into an online application and you're given an instant pre-approval letter, without anyone ever analyzing your income documents, tax returns, profit & loss statements, balance sheets, and other financial information, is that really doing you any good?  Aren't you being asked to effectively calculate your own self-employment income?  Using shortcuts that other lenders offer can do more harm than good.

At LoanBud, we won't make you calculate your own income.  We will analyze and underwrite your tax documents up front, so you can relax knowing your income has already been approved.  If we determine your tax returns won't qualify, we will provide you with alternatives such as utilizing your bank statements instead of your tax returns.

When it comes to self-employed applicants, most lenders are not flexible with the documentation that can be used.  

At LoanBud, we believe self-employed borrowers need more ways to get approved, so we provide the following options:

• Full documentation: 2 years personal and business tax returns, year-to-date profit & loss statement and balance sheet
• Bank statements: 12 – 24 months of personal or business bank statements (no tax returns required)
• 1099 only: 24 months of 1099’s and year-to-date earnings statements (no tax returns required)
• No doc: No doc mortgage / no ratio loan (employment, income, and tax returns are not required)

If you have at least 110% of the purchase price in liquid assets – meaning assets that are easily convertible into cash – LoanBud will not require income verification to qualify for a mortgage loan. 

This factor can be a major benefit for a borrower whose small business is in its infancy with less than two years of history.  You also get credit for all of your liquid assets, which includes retirement accounts, brokerage accounts, the cash value of life insurance policies, and more.  

Qualifying using liquid assets only is known as an asset based loan, and can be used by any borrower to qualify, regardless of whether or not you are self-employed.

Yes, at LoanBud we offer no doc refinances using only bank statements and allow you to take cash out up to 85% of the value of the property.

LoanBud offers self-employed bank statement mortgage loans up to $10 million, with higher loan amounts considered on a case-by-case basis.

Yes, if you are self-employed you can get a mortgage with unfiled tax returns.  Since you are qualifying using 12 - 24 months of bank statements, and not using tax returns, we do not verify whether or not your tax returns have been filed.