Mortgage Options For Self Employed Buyers

Mortgage Options For Self Employed Buyers

Mortgage Options for Self-Employed Buyers
Self-employed homebuyers generally have more difficulty getting a​ mortgage,​ because of​ the​ way their income is​ reported and because they are often perceived as​ not having the​ job security of​ others – if​ they get sick,​ for example,​ their whole operation may be down for the​ duration .​
Even self-employed real estate agents and mortgage loan officers encounter this roadblock en route to​ mortgages .​
But there are a​ number of​ options available to​ those who are self employed and trying to​ secure financing to​ buy a​ home.
If you​ have good credit and enough money to​ pay a​ significant down payment,​ you​ can use so-called low-document and no-document loans,​ two of​ the​ most popular options for self employed borrowers.
Low-doc loans require a​ larger than normal down payment,​ but in​ exchange; you​ don’t have to​ verify your income by showing tax returns and other financial paperwork .​
Usually a​ credit check and one or​ two bank statements is​ sufficient documentation .​
The process is​ streamlined,​ simple,​ and advantageous for those whose income may look smaller on​ paper than it​ actually is​ .​
The closely related no doc loans require no documentation of​ income at​ all .​
These are one of​ the​ easiest loans of​ all to​ process,​ so if​ you​ qualify for one of​ these,​ your mortgage application will not take very long at​ all .​
The downside is​ that both of​ these loans require larger down payments – usually 20 percent or​ more – and they carry slightly higher interest rates .​
But for those who don’t mind paying a​ little extra for the​ convenience of​ qualifying,​ both mortgages represent excellent choices.
Many do-it-yourself home sellers will also offer to​ arrange their own owner financing for those who are self-employed .​
They know that this gives them an​ edge in​ a​ competitive market,​ and they often understand that self-employed people constitute one of​ the​ highest income brackets,​ and are usually dependable borrowers .​
Even if​ you​ aren’t dealing with for sale by owners directly,​ you​ can request your Realtor to​ show you​ houses that offer seller financing,​ in​ order to​ discover more mortgage options as​ you​ house hunt.
In addition to​ owner financed purchases,​ self-employed people can look for funds from professional private lenders .​
Many private investors sell mortgages for a​ living,​ and they offer competitive and unique kinds of​ loans,​ in​ order to​ gain their share of​ a​ niche market that is​ not normally served by the​ traditional banking community .​
If you​ are self-employed,​ chances are you​ can borrow money to​ buy a​ house by going to​ a​ private lender in​ your area .​
You will probably pay a​ higher interest rate,​ but that is​ going to​ be the​ case with almost any special loan made to​ assist those who are their own bosses .​
Once you​ own a​ home and have equity in​ your property,​ you​ will probably qualify to​ refinance into a​ conventional type of​ mortgage,​ so that is​ a​ good plan for the​ future for those whose choices may be limited in​ the​ beginning because of​ self-employment status.

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