Refinance Options with No Documentation or a Stated Income Loan
- Stated Income Non-Conforming Loans
- No Income No Asset Home Refinancing
- Reduced Doc Mortgage Refinance Loans
- Stated Income/ Verified Assets Refinance
- Limited Documentation Jumbo Loans
- No Doc Home Equity Loans
Banks and mortgage lenders typically evaluate your income over the past two years when considering mortgage applications, especially for self-employed individuals. In the case of self-employment, it’s your net profit that matters, not your gross income the total income remaining after deducting expenses.
If your income increased in the second year, lenders often calculate an average of the two years. However, if your income decreased in the second year, they may base their assessment on the lower-earning year. Lenders may express caution if there’s a significant drop in income, so be prepared to provide an explanation if needed.
Self-Employed Mortgage Requirements
In general, Fannie Mae and Freddie Mac guidelines dictate that borrowers should have a minimum of two years of self-employment income to qualify for a mortgage. Exceptions may exist for those self-employed for just one year if they meet additional criteria, such as having worked in the same occupation in the preceding years with comparable or higher income.
If there are less than two years of business records, anticipate a more thorough examination, and verification of any prior employment will be necessary.
Private money lenders typically have less income requirements and many will use 24 months of bank statements rather than 2 years of tax returns. These are called non qualified mortgages. These non QM lenders offer no income mortgages and bank statement loans for borrowers that meet their lending criteria.
Document Requirements for Self-Employed Mortgage Programs
While specific requirements can vary among lenders, be prepared to furnish the following below:
- Government-issued identification.
- Complete personal tax returns for the past two years.
- IRS Form 4506-T, granting permission for third parties to access your tax records.
- Earnings statements.
- Bank statements for both business and personal accounts.
- Statements from asset accounts, including retirement or investment accounts.
- Business license.
- Monthly mortgage statement.
