If you’re a self-employed business owner, you know that your tax returns on paper may not be a good representation of your worth as a borrower. Unlike government loans (like FHA, USDA, and VA loans) and conforming loans (which conform to guidelines set by mortgage giants Fannie Mae and Freddie Mac), portfolio loans can serve many self-employed borrowers with more options then standard tax return income qualification. Portfolio loans are unique because they do not have to meet the same requirements as conforming and government-insured loans. Some do not require any tax returns, bank statements only, limited documentation, or no income verification at all. These loans are funded by private investors and kept on lenders’ books instead of being sold and repackaged by Fannie Mae and Freddie Mac. Only powerful specialty lenders offer mortgage portfolio loans, and many of them do not work with consumers directly. Typically a good mortgage broker will have more resources for these programs than banks. At JZ Mortgage Services we work with 100+ lenders to find the best solutions for our self-employed clients. Learn more about self-employed financing solutions below and contact us if you would like to learn more.
Home Financing Challenges for Self-Employed Borrowers
What benefits you, as a self-employed person or small business owner, during tax season may not serve you best when it comes to an evaluation of your financial fitness while getting approved for a home loan. You may have filed many write-offs, which can drastically affect your official income on paper and may not be enough to qualify you for the level of financing you desire. If you own multiple businesses and take a loss on one of them, it may also offset the profits you made in another business and disqualify you for conforming to financing.
You may also have struggled with taxes in the past and have not filed or currently owe the IRS for past-due taxes (Note: If you have a payment plan or are filing late, you will face fewer challenges than if you have an official tax lien, which creates a more complex issue). In general, any problem with current or past tax filing that may preclude you from conventional financing may not disqualify you from getting a portfolio loan.
When it comes to credit scores, some of our self-employed clients have great scores while others have lower scores that may typically disqualify them for conventional financing. We understand that credit scores can take a beating, especially while a person is getting a business off the ground, so a low score doesn’t mean you can’t find a home financing solution.
Portfolio Loans as a Solution
- No income verification loans
- Stated income loans
- Limited or light documentation loans
- Bank statement only loans
- Conventional fall out loans
- Loans for clients recovering after bankruptcy
- Loans for short sale and foreclosure
- Foreign national loans
- Alt-A loans
- Subprime loans
- Private loans
- ITIN loans (for new Americans with an Individual Tax Identification number instead of a Social Security number)
- Investor loans
- Other programs that do not require an evaluation of personal finances
Solutions that Work for You
The JZ Mortgage Services, Inc. team will evaluate your unique situation to determine where your strong suits are from a lender’s perspective, even if you also have some weak areas. If you can’t show your tax returns, for example, but you have documentation showing a year of personal deposits or two years of business deposits, this may be enough to show lenders that you’re a worthy borrower.
When you’re ready to learn more about portfolio loans for self-employed borrowers, our team is here to help. We’re local to Bradenton, Sarasota, St. Petersburg, Tampa, and all of Florida. We work with the nation’s top lenders for your home financing needs. Contact us to get a free quick quote and find out your home loan options today.