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Self Employed Mortgage Loans – Great Option for those with No Income Verification

Today, many people are looking at many different ways of making money. These are the people who are self-employed, like freelancers, freelance interior decorators, fashion designers, etc, amongst a host of others. Such people cannot supply any fixed income proof which is a pre-requisite when it comes to getting a loan. It is for this special group of people, that a self employed mortgage loan has come like boon and an answer to their financial difficulties.

Under Writers and a Loan

The basis of self employed mortgage is a result of the way underwriters rely on financial information of the self employed person as prepared by their accountants. Accountants are experts at reducing the tax liabilities of their clients by minimizing their current net income. However, under writers for a loan, see this current income to formulate their decision as to whether to offer a loan or not.

At times, the whole method adopted by an underwriter to scrutinize and review the financial condition of the borrower, makes the self-employed person appear in a worse financial condition then he or she really is. Therefore the need for a self employed home loan.

The Full Documentation Route of Self Employed Loan

If you want to take a self employed home loan then you must be able to provide the following documents:

» Business Tax Returns – Two Years
» A Profit and Loss Statement
» Reference of Credit for the preparation of a business credit report
» Business Tax Returns – Two Years
» Business Balance Sheet – Current

Additional document will be asked for, as and when necessary when it comes to self employed mortgage.

The ‘No Doc’ Self Employed Mortgage Loan

In a bid to make the application process much easier and suited to the financial situation of a self employed person, many loan services providers have come out with a viable new option. Herein, any borrower, who has a good credit, self employed or not, can apply for the ‘no doc’ loan on the brunt of the good credit score.

With regards to this self employed home loan, there is no requirement of an income proof verification or no analysis of the financial profile of the borrower’s business. All you need to have is a property, and after due appraisal of the property you get your loan. The only verification would be about whether you have sufficient assets for down payment and closing costs.

It’s important that all those who want to go for a self employed loan must ask around as to the option available in this regards. At times, they face the short end of the stick of underwriters. For e.g. there are times when a business might have made losses in the year 2008 but would have made a good bit of money in the previous two years. However, the averaging method would still unfairly deny the borrower, the loan.

To protect yourself from such an option, you must not select the first self employed home loan that is offered to you. You must choose from the loans that would suit your needs and requirements and the ones that you have the possibility of getting.

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