Self Employed Borrowers and Verification of Employment

Mortgage Service for self-employed borrowers. Being self-employed can make getting a mortgage can be difficult. Self-Employed borrowers sometimes have a multitude of income sources or companies making for a complicated tax return including tax write-offs.

How Can I Qualify for a Non-Qualified Mortgage Loan?

There are 2 critical areas in qualifying a self-employed borrower for an Alt Doc loan program, 1. income and 2, employment. It starts with a good Loan Officer will know to ask you the correct qualifying questions to best serve you

How do Non-QM Mortgage Lenders Qualify My Self-Employed Income?

Any qualifying income that can be sourced from an S corporation or LLC and Partnerships should include a valid Secretary of State documentation website listing. Active and in good standing. For 1099 sole Proprietors in an industry that requires a license also be verified from a license authority confirmation must license is active directions. Examples of common business license include, but are not limited to, state or local tax licenses, City business licenses, professional license for borrower in the fields of Real Estate, construction, law, medical industry, Etc.

How Long Must I be Self-Employed to Qualify?

Confirmation of self-employment requires the existence of the business be verified with an active one-year history (reduced doc) or a two-year history. For a Bank Statement and 1099 Only program. The self-employed borrower whose income is being used for DTI qualification, the broker must document one of the borrowers has consistently been self-employed for the last 24 months to qualify for Alt loans or a minimum of 1 year to qualify for our Lite Doc programs 

How will a Non-QM Mortgage Lenders Verify My Self-Employment?

Different lenders have their own guidelines in terms of what constitutes a Verification of Employment (VOE). Third party verification is an accepted method of verification. Third-party verification would be a "CPA letter" or business license from a regulated agency or applicable license bureau are common ways to "verify employment".  All self-employed borrowers must provide a Business Description Narrative to include business name, percentage of ownership, business address, business type or industry, should describe business type (product, service or both) details on how income is generated, size of company and number of locations describing Property Type(s) (home office, office(s), number of years in existence, number of employees, etc.

Third Party Verification

Third Party can mean a variety of methods such as internet business listings.

CPA Letter Lender Required Criteria

  • Business Name
  • Percentage of Ownership
  • Number of Years (Alternative Doc: 2 years. Lite Doc: 1 year) in Business Existence
  • Professional Tax Preparer Company Letterhead

Note: Certain lenders require the underwriter document all third-party employment verification sources of the self-employed borrower's company within 15 days of the note date. Some lenders do not.

 

 

Loan Scenario Form - Credit Check Not Required

Available in the Following States:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Mississippi, Missouri, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, and Washington