Poli Mortgage Lending Guidelines for Self-Employed Borrowers.
When it comes to getting a mortgage, the self-employed borrower may face a little more paperwork and preparation than traditional W2 employees. However, it is important to understand Poli Mortgage offers self-employed individuals most of the same mortgage loan product options as every other consumer. This applies to conventional loans that conform to Fannie Mae and Freddie Mac guidelines, Jumbo Mortgages, FHA mortgage programs, and government loan programs such VA loans or USDA loans.
A person is considered self-employed if they have more than a 25% ownership in an active business or when commission makes up more than 25% of their annual income. This active business might be a sole proprietorship, a partnership or a corporation. Any individual who receives a 1099 statement for income received and can deduct certain business expenses on their federal tax return may also have a self-employment status.
To apply for a Poli Mortgage loan, a self-employed individual will need to provide the standard complement of mortgage approval and loan documents. This includes a mortgage application, two years of tax returns, the most recent bank and investment statements, as well as any other standard documents required by Poli underwriting.
As a self-employed borrower, you may also need to include certain business records with your Poli Mortgage loan application to ensure your loan request can be approved. These business records will be analyzed for cash flow and profitability, which helps to verify your income. In most cases, this information can be derived from tax returns, although an underwriter may ask you for further documentation to verify cash flow. Poli Mortgage may also often request a year-to-date profit and loss statement (P&L) from the self-employed borrower. The underwriter will compare the information in your tax returns and bank statements to the estimated income you list on your Poli Mortgage loan application.
It is important to reiterate, a self-employed borrower is generally required to include a minimum of two years of filed business tax returns. If you are just starting out in your own business, it may be more difficult to obtain financing as most investors require two years of self-employment history to qualify for a mortgage loan. However it is best to discuss your specific situation with a loan officer at Poli to determine your qualifying requirements.
Many times Poli Mortgage borrowers have a side business in addition to their regular job. Poli Mortgage must consider any business loss or profit reported on a tax return in your net income calculation.
If you are a self-employed borrower, it is important for you to speak with a qualified Poli Loan Officer before making any assumptions about your verifiable income. At times, we are able to add certain expense items listed on your tax returns back into your income. Your loan officer will guide you through this process and also help you identify all the required documents ahead of submitting your application, so you can avoid potential pitfalls.