Self-Employed Mortgage Loans in Annapolis, MD
Being self-employed doesn't mean you can't qualify for a mortgage. Business owners, independent professionals and other self-employed borrowers may have several financing options depending on how their income is documented.
Redwood Mortgage Services helps self-employed homebuyers in Annapolis, Anne Arundel County and throughout Maryland explore traditional and alternative mortgage options based on their individual financial circumstances.
How Do Self-Employed Borrowers Qualify for a Mortgage?
Self-employed borrowers can qualify for many of the same mortgage programs available to traditionally employed borrowers. The difference is often how qualifying income is documented and calculated.
Depending on the loan program and the borrower's circumstances, a mortgage review may consider tax returns, business income, personal or business bank statements, profit-and-loss information, assets and other documentation.
Having business deductions or income that varies from year to year does not necessarily mean a borrower cannot qualify. The key is determining which available mortgage program and income-documentation method best fits the borrower's financial situation.
There isn't one “self-employed mortgage.” The right financing approach depends on the borrower's income, business structure, credit, assets, property and overall financial picture.
Mortgage Options for Self-Employed Borrowers
Self-employed borrowers may qualify for conventional financing when their income can be documented according to the program's requirements. Tax returns and other financial documentation may be used to calculate qualifying income.
For some self-employed borrowers, tax returns may not fully reflect the cash flow available to qualify for a mortgage. Bank statement programs may provide an alternative method of documenting qualifying income using personal or business bank statements, depending on the program.
Non-QM mortgage programs may provide additional options for borrowers whose income, assets or financial circumstances do not fit traditional mortgage documentation guidelines.
These are not the only mortgage options that may be available to a self-employed borrower. The appropriate program depends on the borrower's individual qualifications, property, financing goals and available loan programs.
Why Can Mortgage Qualification Be Different When You're Self-Employed?
Employees typically document income with items such as pay stubs and W-2s. For self-employed borrowers, income may come from a business, partnership, corporation, sole proprietorship or other source, so determining qualifying income can involve additional documentation and analysis.
Business deductions can also affect the income shown on tax returns. A business may generate substantial revenue or cash flow while the income used for mortgage qualification looks different after allowable business expenses are considered.
This is why reviewing the full financial picture can be especially important for a self-employed borrower. The goal is to determine which available mortgage programs and documentation methods may appropriately reflect the borrower's circumstances.
The lowest taxable income does not necessarily tell the entire story of a self-employed borrower's financial picture.
Documents Self-Employed Borrowers May Be Asked to Provide
Depending on the mortgage program, personal and/or business tax returns may be used to document income and evaluate the borrower's financial history.
Profit-and-loss statements, balance sheets or other business records may be requested depending on the loan program and the borrower's business structure.
Personal or business bank statements may be reviewed to document assets, cash flow or, with certain programs, qualifying income.
Documentation confirming the existence and operation of the business may be required, depending on the program and circumstances.
Documentation requirements vary by loan program and borrower. Stuart can help identify what may be needed based on the financing options being considered.
Self-Employed Mortgage Options in Annapolis and Maryland
Redwood Mortgage Services helps self-employed homebuyers and homeowners explore mortgage financing from our Annapolis office. Whether you're a business owner, independent contractor, consultant or other self-employed professional, the way your income is earned should be considered when evaluating your mortgage options.
We work with borrowers in Annapolis, Anne Arundel County and throughout Maryland to review available financing options, including traditional mortgages and alternative income-documentation programs when appropriate.
Because every self-employed borrower's finances are different, we take the time to understand how you earn your income before determining which available mortgage options may fit your circumstances.
Talk With Stuart About Your Mortgage Options
Self-employed income can require a little more analysis, but you don't have to figure out the mortgage guidelines on your own. Stuart Kiehne can review how you earn your income, discuss available financing options and help you understand what documentation may be needed.
Frequently Asked Questions About Mortgages for Self-Employed Borrowers
Yes. Self-employed borrowers may qualify for many mortgage programs. The primary difference is often how income is documented and calculated. The available options depend on the borrower's individual financial circumstances and program requirements.
No. Some self-employed borrowers qualify for conventional or other traditional mortgage programs. Bank statement financing may be an option when an alternative method of documenting qualifying income is appropriate.
The calculation depends on the mortgage program and the borrower's business and income structure. Tax returns, business income, expenses and other financial documentation may be reviewed to determine qualifying income.
They can. Business deductions may reduce the income reported on tax returns, which can affect the income used for certain mortgage qualification methods. Other available programs may use different documentation depending on the borrower's circumstances.
Certain mortgage programs may allow eligible self-employed borrowers to use business bank statements as part of an alternative method for documenting qualifying income. Requirements vary by program.
Depending on the mortgage program, documentation may include personal or business tax returns, bank statements, profit-and-loss statements, business financial records and verification of the business. Requirements vary by program and borrower.
Yes. Redwood Mortgage Services helps self-employed homebuyers and homeowners in Annapolis, Anne Arundel County and throughout Maryland explore traditional and alternative mortgage financing options based on their individual circumstances.