NON-Traditional Self Employed Mortgage Borrowers Guidelines


This BLOG NON-Traditional Self Employed Mortgage Borrowers Guidelines Was PUBLISHED On January 10th, 2019

NON-Traditional Self Employed Mortgage Loans is now available.

  • Self employed borrowers had a rather difficult time qualifying for home loans
  • This is due to the write offs they are able to utilize as self employed borrowers
  • Lenders go by adjusted gross income after all unreimbursed expense deductions
  • This often disqualified many business owners or non-W2 wage earners
  • NON-Traditional Self Employed Mortgage is often referred to as non-qm loans or bank statement loans for self employed borrowers

Qualified Income With NON-Traditional Self Employed Mortgage

Qualified Income NON-Traditional Self Employed Mortgage is calculated using bank statement deposits. 

  • NON-Traditional Self Employed Mortgage is often more difficult than regular W2 wage earner mortgages who has traditional income
  • Reason qualified income is important is because mortgage underwriters need to determine a borrower’s ability to repay

Ability To Repay Mortgage With Non-Traditional Income

This means that mortgage underwriters need to determine borrowers ability in earning stable and continuous income to qualify for mortgage:

  • The actual income a borrower makes is often difficult to decipher
  • This is because shrewd accountants are experts in using the IRS Tax Loopholes in minimizing tax liabilities by minimizing taxable income with write offs

Launch Of Bank Statement Loans For Self Employed Borrowers

Due to this practice, Gustan Cho Associates at Loan Cabin Inc. launched bank statement loans for self employed borrowers.

  • These loans are portfolio loans and are often referred to as non-qualified loans
  • There is no income tax returns required. Mortgage underwriters will take either 12 or 24 months bank statement deposits
  • The monthly average will be the qualified income
  • There are no set NON-Traditional Self Employed Mortgage Guidelines
  • Each case is unique and underwriters can be open to making exceptions for each individual borrower

If the mortgage underwriter believes borrowers have the ability to repay, chances are the mortgage will get approved.

Non-Traditional Mortgages For Self Employed Borrowers

Self employed borrowers now have plan B if they do not qualify for traditional self employed mortgages.

  • Borrowers with a lot of unreimbursed expenses, they can now qualify for bank statement loans for self employed borrowers
  • No income tax returns are required with this loan program
  • This loan program has been structured and designed for self employed borrowers when income tax returns are an issue when qualifying for traditional mortgages
  • Borrowers can use either personal or business bank statements to qualify

NON-Traditional Self Employed Mortgage Guidelines And Requirements

Borrowers need to be self employed. Either business owners and/or 1099 wage earners.

  • 10% to 20% down payment
  • Down payment requirements depends on borrowers credit scores
  • Credit scores down to 500 FICO
  • Mortgage interest rates depends on borrowers credit scores and down payment
  • No private mortgage insurance required
  • No maximum loan limit up to $3 million
  • Debt to income ratios are capped at 50% with compensating factors
  • Borrowers can use supplemental income from bank statements by using the asset amortization formula
  • 15 and 30 year fixed rate mortgages
  • 5/1, 7/1, and 10/1 Adjustable Rate Mortgage
  • Fully amortized
  • Interest only options for fixed rate period available on ARM

Gustan Cho Associates Mortgage Group at Loan Cabin Inc. offers bank statement loan programs for both owner occupant and investment properties. Contact us for more information at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. The Gustan Cho Team at Loan Cabin Inc. is available 7 days a week, evenings, weekends, and holidays.

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