What Self Employeed Borrowers Should Expect in Maryland, DC and Virginia

If your a self employeed borrower finding a loan, either a refinance or purchase loan, is pretty tough these days.  So what should you expect through the loan process?  First be prepared to show a lot of income documentation.  At a minimum, you'll need 2 years of personal and business tax returns.  If you pay your self a salary, you'll also need to show 2 years of W-2's, and your 2 most recent paystubs.  What are underwriters looking for with all that documentation?  They want to see a consistant flow of income.  They want to make sure you're business has a history of making money, and your income is not at risk to drop dramatically.

What about assets?  You'll have to show your personal assets, however, if you're using any of your business assets toward your purchase, you'll need to show your business assets.  Along with that, if there are any large deposits, they'll need to be sourced (show where they came from).  Once you clear that hurdle, you'll need a letter from a 3rd party accountant to let the lender know that even though you're using business money for your personal home purchae, it will not negativly effect your business.  Basically, lenders want to know that because you're using business assets for your personal purchase, your business will still run as it did before and not risk going out of business.

Its important to know that for self employeed people there is still pleanty of opportunity to obtain purchase and refinance loans, just be prepared to show a lot of documentation.

Need a loan officer experience with self employeed borrowers in Maryland, DC or Virgina?

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