This Article Is About Jumbo Mortgages For Self-Employed Borrowers With No Tax Returns
If you are in the market for a jumbo mortgage and you are self-employed, you have found the right website. Gustan Cho Associates are experts in jumbo mortgages for our self-employed clientele. America’s economy still relies on self-employed individuals. It is known that our tax laws are not the nicest for our self-employed citizens. It is a double edge sword every tax season when self-employed. If you take write-offs and pay less income tax, it is harder to qualify for a mortgage. If you do not take the tax write-offs, you’ll have more qualifying income for a mortgage, but then you are required to pay more federal income tax. You will want to talk to your accountant about a nice breakeven point however most self-employed individuals do not have that luxury.
In this blog, we will detail how to apply for a jumbo mortgage as a self-employed individual with Gustan Cho Associates.
Types Of Jumbo Mortgages For Self-Employed Borrowers
What type of jumbo programs is available for self-employed borrowers? We offer a full slate of jumbo mortgage products. This blog, it will detail a few I have our most popular jumbo mortgage products. Standard Full Documentation Jumbo Mortgage. If your business is thriving and has been in existence for at least two years, we can attempt to use our everyday jumbo mortgage products. We have very competitive interest rates on your standard full documentation qualifying jumbo loan products. When you are using a standard jumbo product, the underwriter will use a two-year self-employed average based on your federal tax returns. Depending on the type of business, schedule C, S corporation, or K-1, the underwriter will complete their calculations accordingly. Your everyday jumbo product will have a large reserve requirement. Usually 12 or even up to 18 months depending on the qualifications. These cash reserves and strict income calculation guidelines hinder many individuals from qualifying for your everyday standard jumbo mortgage. If you have been turned down by your bank for a jumbo mortgage, we have other routes to go down.
Mortgage Options For High-End Home Buyers
What other options are available? Bank statement loans for self-employed borrowers:
- A bank statement loan is a great alternative for a self-employed individual
- A bank statement mortgage maybe your best friend
- This is a mortgage product designed for the needs of self-employed taxpayers
- Instead of getting your federal tax returns involved, your income will be based on business-related deposits shown on your bank statements
- Depending on the loan program, income will be calculated from your most recent 12 or 24 months of bank statements
- You may use personal or business bank statements
- An underwriter will analyze your business-related deposits and come up with a monthly average to use for your qualifying income
- The general rule of thumb; they will count 50% of all business-related deposits
- The reason they use 50% of your deposits is, the remaining 50% of deposits are estimated to be expenses for the business
You can count more than 50% of business deposits if you have a detailed expense ratio letter from your licensed CPA (certified public accountant).
Bank Statement Jumbo Mortgages For Self-Employed Borrowers With No Tax Returns
What are some basic qualifications for a jumbo bank statement loan?
Credit score requirement:
- 600 – 659 – 20% down payment
- 660 and higher – 10% down payment
- Loan amounts up to $2,000,000 (even higher on a case by case basis)
- Debt to Income up to 50%
- 1 mortgage late payment allowed in the past 12 months
This is a great opportunity to purchase a home if your tax returns do not show enough qualifying income. We encourage you to reach out with questions surrounding bank statement mortgages. Please call our bank statement loan expert, Mike Gracz on 630-659-7644 or email firstname.lastname@example.org.
Asset-Depletion Mortgage Guidelines
- There are mortgage programs available for clients without a source of income who have built up assets throughout their life
- These mortgage products are called asset depletion because they calculate your monthly income based on your total assets
- Depending on your credit score, they will total your assets and divide by 60 – 180 months to come up with your monthly income
There is a lot of flexibility in this loan program, below are some key qualifications:
- The borrower’s income will be based on 100% of the value of retirement accounts!
- Credit scores down to 620
- As little as 15% down payment (with credit scores 720 and higher)
- Cash-out refinances available
- Interest-only payments available
- Loan amounts up to $6,000,000 ($150,000 minimum)
- DTI up to 50%
- 3-12 months reserves required (based on loan amount)
95% LTV Jumbo Mortgages
- This is a great loan product for self-employed borrowers
- Please keep in mind the only way to qualify for the 95% loan to value jumbo mortgage is with full documentation and income calculated off your tax returns
This mortgage product has strict qualifications but is one of very few low down payment options for jumbo mortgages. See below:
- The minimum credit score of 720
- Full documentation loan (W2 and/or tax returns required)
- Only available for one-unit primary residences
- 0 late payments in the past 12 months
- Loan amounts up to $1,500,000
- Max DTI 30%/40%
- 12 months PITIA reserves required (retirement funds can be used for this requirement)
- 4 year waiting period after a short sale, deed-in-lieu, or foreclosure
As you can see from this article, we have a full slate of jumbo mortgage products available for our clients. We offer more mortgage options than most lending institutions. We specialize in lower credit score loan products, even with Jumbo loans. We do not have any LENDER OVERLAYS on our conventional, FHA, and VA mortgage loans. We received numerous phone calls a day from borrowers with general mortgage questions. More times than not, we are able to help. The mortgage process can be tricky, our goal is to take the stress out of the process. Gustan Cho Associates are available seven days a week, mornings and evenings. For direct questions, feel free to call 630-659-7644.
February 26, 2021 - 4 min read