Self-Employed Mortgages

What Are Self-Employed Mortgages?

For over 10 million self-employed individuals, securing a home loan can seem challenging without traditional income proof. But don't worry, there are plenty of mortgage options just for you.

Unlike traditional employees with W-2 forms, self-employed individuals can use different documents to verify their income. These include personal or business tax returns, 1099 forms, and Profit and Loss statements. With these documents, you can demonstrate your income and explore various mortgage opportunities available to you.

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Self-Employed Mortgage Benefits

Who Can Benefit?

If you're an independent business owner, contractor, or freelancer, a self-employed mortgage might be perfect for you. This type of loan helps those without traditional wage-earner income buy or refinance a home.

Available Loan Types

Self-employed individuals may qualify for various loan programs, including Conventional, FHA, VA, and USDA loans. Each offers unique benefits:

FHA Loans: Ideal for first-time homebuyers, featuring lower down payments and relaxed credit requirements.
Conventional Loans: Cost-effective if you meet the qualifications, typically requiring a higher credit score and larger down payment.

Proving Your Income

To apply, you'll need to demonstrate your income through documents like tax returns or bank statements.

Tips Before Applying

Separate Finances: Keep business and personal accounts distinct to simplify financial reviews.
Credit Health: Resolve credit report errors, lower your credit utilization, or consolidate debts to boost your score.
Major Purchases: Avoid large purchases before closing your loan as they can affect your credit score and loan eligibility.

Qualification Timeline

Generally, you need at least two years of self-employment to qualify. Some may qualify after one year with adequate documentation of previous similar work and income.

Important Considerations

Mixing business and personal expenses can obscure your financial picture. Maintain separate accounts and ensure your business income is verifiable through federal tax returns, business tax returns, balance sheets, or profit and loss statements.

Self-Employment Income Verification Requirements

Documentation Needed:

Duration of Self-Employment:
- Must have been self-employed for a minimum of two years.
Tax Returns:
- Provide personal tax returns for the past year, including all schedules and attachments.
- Submit business tax returns for the same year as personal returns, with all schedules included.
Recent Financial Statements:
- A signed and dated Profit and Loss statement covering the last 90 days.
- Business bank statements for the last 90 days, including all pages.

Self-Employment Mortgage Loan Options

Loan Options:

Fixed 30-Year: Stable monthly payments over 30 years.
Flexible Uses: Buy a new home, refinance, or get cash out.
First-Time Homebuyers: Great for those buying their first home.
Property Types: Eligible properties include warrantable condos, primary residences, second homes, or investment properties.

Who Can Apply? If you're self-employed, we offer a variety of loan options tailored to your unique financial needs.

Get Started: Contact our team at New American Funding to find out how our Self-Employed loan options can help you achieve your home financing goals.

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Mike Ecker guided me through every roadblock with ease. Whenever we hit a snag with the seller/realtor process he was there to calmly walk me through and answer any questions with certainty. Can’t say enough fantastic things about his plethora of knowledge in the mortgage industry. I will be sure to refer all of my friends and family to him.

5.0

Edward J A. of Blackwood, NJ

First and foremost, Gloria James is amazing!! She literally held my hand and walked me through every step, and as a first-time homebuyer, this is the exact type of assistance I was looking for. Buying a home for your first time is very scary, intimidating, and there's so much information and paperwork and majority you will not know what your reading or signing, but Gloria was an amazing advisor and she was super prompt and thorough. I appreciate her quick responses and providing clarity along the way. I have already started giving out Gloria's information to friends, family members, and strangers. Because of Gloria, I was able to close on the house in less than one month and the entire process was smoother than I could've ever imagined. First time homebuyers do not have to be scared during this process when they have Gloria and her team in their corner. I am forever grateful for this experience, thank you!

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Mayah D. of Puyallup, WA

Zach and the team at NAF were proactive, efficient, and kind. Zach identified additional information that I might need for underwriting, which helped me be prepared and keep the timing on track. He kept in constant communication and was always responsive to inquiries or requests throughout the entire process. Even though he'd only just moved to NAF, he was able to get my pre-qualification set up lightning fast and ensure that I understood each step of the process. I appreciated his help with the early offer letters and the genuine support and cheerleading as we neared closing. Thank you, Zach!

5.0

Tinsley H C. of San Rafael, CA

The people we worked with, like Tammy and Ken, made everything easy to understand and always checked on us throughout to make sure we knew what to expect. The process was simple and efficient. I am so happy we used NAF and got to buy our first home with the help of Tammy!

5.0

Brittany J M. of Phenix City, AL