Jumbo Mortgages For Self-Employed Borrowers

Jumbo Mortgages For Self-Employed Borrowers

Gustan Cho Associates are mortgage brokers licensed in 48 states

This guide covers jumbo mortgages for self-employed borrowers with no tax returns. If you are in the market for a jumbo mortgage and are self-employed, you have found the right website. Gustan Cho Associates are experts in jumbo mortgages for our self-employed clientele. Joey Virga, President of Virga Realty in Panama Beach, Florida, explains the high-end real estate market as follows:

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 are self-employed with traditional jumbo loans.

If you do not take the tax write-offs, you’ll have more qualifying income for a mortgage, but you must 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. This blog will detail how to apply for jumbo mortgages for self-employed borrowers with Gustan Cho Associates.

Types of Jumbo Mortgages For Self-Employed Borrowers

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What types of jumbo mortgages for self-employed borrowers are available? We offer a full slate of jumbo mortgages for self-employed borrowers and traditional jumbo loans. This blog will detail a few I have our most popular jumbo mortgage products. Standard Full Documentation Jumbo Mortgage. If your business is thriving and has existed for at least two years, we can attempt to use our everyday jumbo mortgage products. Our competitive interest rates are on your standard full documentation qualifying jumbo loan products.

When 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. We have other routes if your bank has turned you down for a jumbo mortgage.

Jumbo Mortgage Options For High-End Home Buyers

What other options are available? There are many non-QM jumbo mortgages for self-employed borrowers. Bank statement loans for self-employed borrowers: A bank statement loan is a great alternative for a self-employed individual. A bank statement mortgage may be your best friend. There are jumbo mortgages for self-employed borrowers designed for the needs of homebuyers of high-end homes, shares Alex Carlucci, a senior loan officer who is an expert on jumbo mortgages for self-employed borrowers.

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 develop a monthly average for your qualifying income. The general rule of thumb; they will count 50% of all business-related deposits. They use 50% of your deposits because the remaining 50% are estimated to be expenses for the business. You can count over 50% of business deposits with 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%
  • One mortgage late payment allowed in the past 12 months

If your tax returns do not show enough qualifying income, this is a great home purchase opportunity. We encourage you to reach out with questions surrounding bank statement mortgages. If you have any questions or need to qualify for jumbo mortgages for self-employed borrowers, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at alex@gustancho.com.

Asset-Depletion Jumbo Mortgages For Self-Employed Borrowers

Asset-Depletion Mortgage GuidelinesAsset depletion: Mortgage programs are available for clients without a source of income who have built up assets throughout their lives. 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 them by 60 – 180 months to come up with your monthly income. There is a lot of flexibility with the asset-depletion mortgage program. Dale Elenteny, an asset-depletion and no-doc mortgage loan expert, explains the asset-depletion mortgage loan program as follows:

Key qualifications non-QM jumbo mortgage guidelines include the borrower’s income will be based on 100% of the value of retirement accounts! Non-QM Jumbo mortgage loan programs allow credit scores down to 620. Jumbo loan borrowers can purchase a high-end home with as little as a 15% down payment (with credit scores 720 and higher).

Cash-out refinances are available in no-doc jumbo loans. Interest-only payments are available on non-prime jumbo loans. Gustan Cho Associates offers no-doc jumbo loans with loan amounts up to $6,000,000 ($150,000 minimum). Non-prime jumbo loans with DTI up to 50%. 3-12 months reserves required (based on loan amount) on no-income verification jumbo loans.

90% LTV Traditional Full-Doc Versus No-Doc Jumbo Mortgages For Self-Employed Borrowers

The no-doc 90% loan-to-value jumbo mortgages for self-employed borrowers require no income documentation or income tax returns. The no-doc 90% jumbo mortgages for self-employed borrowers do not want to see income tax returns or traditional income verification. Underwriters use alternative methods to determine qualified income, such as bank statement deposits or assets. Please remember that the only way to qualify for the no-doc 90% loan-to-value jumbo mortgage is for self-employed borrowers using 12 months of bank statement deposits or other alternative ways of determining qualified income.

Traditional 90% LTV Full-Doc Jumbo Mortgages For Self-Employed Borrowers

The other 90% of loan-to-value jumbo mortgages for self-employed borrowers offered is the traditional full-doc jumbo loan program which requires full documentation. Jumbo mortgages for self-employed borrowers is the same as full-documentation for wage earners. Full doc 90% loan-to-value jumbo loans require two years of W2s, 1099s, or income tax returns. The eligibility requirements for the full-doc jumbo loan program are the following:

  • Self-employed full-doc jumbo loans require income tax returns. Income is calculated off your tax returns on full-doc jumbo loans.
  • 90% loan-to-value full-doc jumbo mortgage product has strict qualifications but is one of few low-down payment options for jumbo mortgages.
  • The minimum credit score of 720. Full documentation loan (W2 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%.
  • Twelve months of PITIA reserves are 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 can 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. Call us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at alex@gustancho.com.

Non-QM Jumbo Lending Requirements and Guidelines

Non-QM Jumbo loan lending guidelines are negotiable. In general, borrowers with credit scores down to 500 FICO can qualify for non-QM Jumbo loans. However, the lower the credit scores the higher the down payment. The larger the down payment and the higher the borrower’s credit scores, the lower the mortgage rates. There is no private mortgage insurance required on non-QM Jumbo mortgages. There is no maximum loan limit. Mortgage rates can be competitive on non-QM loans versus traditional Jumbo mortgages. Gustan Cho Associates has a national reputation for being a one-stop mortgage shop. This is because not only do we offer no lender overlays on government and conventional loans but we have every available non-QM and alternative financing loan program out in the market today.

Non-QM Jumbo Mortgages For Self-Employed Homebuyers With No Income Tax Returns Required

Self-employed borrowers can qualify for a Jumbo NON-QM Loans For Self-Employed Borrowers without income tax returns, high credit scores, and low debt to income ratios. You can qualify for Non-QM Jumbo loans with credit scores down to 500 FICO. There is no waiting period after bankruptcy and/or a housing event. Bank Statement NON-QM Loans For Self-Employed Borrowers do not require income tax returns. Lenders will require 12 months of bank statements only and average the monthly deposits. The average of the 12-month deposits will be used as the average monthly income. Withdrawals do not count. Only deposits. Either personal or business bank statements can be used. Borrowers need to be self-employed. In this blog, we will discuss Jumbo NON-QM Loans For Self-Employed Borrowers. Gustan Cho Associates offers Bank Statement Jumbo NON-QM Loans For Self-Employed Borrowers with no private mortgage insurance required.

Bank Statement Jumbo NON-QM Loans For Self-Employed Borrowers Eligibility Requirements

Bank Statement NON-QM Loans are for self-employed borrowers only. Right after the 2008 Real Estate and Credit Meltdown, self-employed home buyers had a difficult time trying to qualify for home loans. The whole mortgage industry went through a major overhaul and changes. Self-employed people have the luxury to write off many expenses. While unreimbursed business expenses are great for tax deductions for self-employed people, it is not good when it comes to qualifying for a mortgage. With our Bank Statement Jumbo NON-QM Loans For Self-Employed Borrowers, business people can now qualify for home loans with no income tax returns.

How Income Is Calculated On Bank Statement Mortgage Loans

With the 12-month bank statement mortgage loan program, income tax returns are not required.

  • 12 months personal and/or business bank statement deposits are averaged
  • The monthly average is the monthly qualifying income
  • If personal bank statement deposits are used, then 100% of the deposits are averaged
  • If the business bank statements are used, then 50% of the average deposits are used as the qualifying income
  • 20% down payment is normally required
  • However, 10% to 15% down payment loan programs are available for higher credit score borrowers
  • There is no private mortgage insurance required on Bank Statement Jumbo NON-QM Loans For Self-Employed Borrowers
  • The maximum loan limit is $3 million
  • A loan limit higher than $3 million will be based on a case by case scenario basis
  • The down payment required depends on the borrower’s credit scores
  • Mortgage Rates are determined by the borrower’s credit scores and down payment
  • Minimum credit score requirements are 500 FICO
  • The higher the borrower’s credit scores, the lower the down payment requirement
  • The maximum debt to income ratio is capped at 50%

Exceptions can be made on non-QM loans since they are non-conforming portfolio loans.

Qualifying For Jumbo Loans For Self-Employed Borrowers

Lenders consider Jumbo Loans a higher risk than traditional government and conventional loans. Higher risk means higher risks. Reason Jumbo Loans are considered riskier investments is in the event borrowers default on their loans, it takes longer to sell the property in the open market. You need a special buyer for higher-end homes. It may take months and/or years longer to liquidate a higher-end home. Lenders want borrowers to have skin in the game when it comes to jumbo mortgages. That is why the more down payment a borrower puts down, the lower the interest rate.

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