Most mortgage lenders require at least two years of stable self-employment before they can qualify for a home loan. Lenders define a “self-employed person” as a borrower who has an ownership interest of 25% or more in a company, or someone who is not a W-2 employee. Obtaining a mortgage for the self-employed in New York presents its own unique challenges in today's market. Maintaining meticulous income records and being able to verify them is no longer sufficient to ease mortgage waters.
Lenders have tightened restrictions and it has become much more difficult to obtain the necessary financing, even for those who have an established long-term business. We understand that getting a mortgage can be frustrating for self-employed workers. The fact is that in New York there is a very high concentration of self-employed workers who are interested in financing the purchase of their home. Mortgage lenders evaluate self-employed customers the same way they would look at others.
They want to make sure you have a decent credit score. They will also look at your debt-to-income ratio (DTI) to determine if you can afford the mortgage payment associated with the loan. Finally, lenders will review asset and income statements to verify their resources. While Rocket Mortgage's down payment requirements don't change as a result of self-employment, some mortgage lenders may try to mitigate your risks by having you make a higher down payment, resulting in a lower loan-to-value (LTV) ratio.
Because of this, it's often best to turn to a mortgage broker, a professional who is familiar with a wide range of lenders across the country, if you want to use one of these loans. For more than 25 years, HomeLife Mortgage has earned a strong reputation in California and Florida as a leading mortgage broker, serving the needs of borrowers who have been unable to obtain conventional financing. As a highly trained mortgage veteran for 40 years, I have financed thousands of borrowers with cutting-edge home loan products.
Mortgage brokerswho have experience with alternative loan programs can also compare prices to ensure that you get the best rate (as well as the lowest fees and closing costs) from non-QM providers out there.
You can also consider working with a mortgage broker, whose job is to learn the ins and outs of each lender's policies regarding loans to self-employed workers and whose relationships should help you move forward with your mortgage application. Most banks, credit unions, and large mortgage lenders don't offer loans with bank statements because they don't conform to existing Consumer Financial Protection Office (QM) rules.