Owning your own home as a self-employed borrower is easier than you thought possible. Gone are the days of placating Uncle Sam’s rigorous, and sometimes seemingly unattainable, qualifications just to prove you deserve to own the four walls you sleep within. There’s a better way and we’re going to break down how you, the self-employed, can qualify for the right loan so you can finally have a place you can call your own.
If you saw our post about what a Non-QM loan is, how it relates to buying a home as a self-employed worker, and how you can qualify for one in general, you can check it out here.
Let’s consider an example. John drives for Uber full time these days. During the pandemic, he lost his job and high-paying salary. Being the resilient person that he is, John looked at it as a blessing in disguise to get out of the corporate grind, but he also had to think about how he was going to provide for himself. He started driving for Uber just to pay the bills but now he can’t see himself going back to work for someone else. He loves being able to make his own hours and work as much or as little as he wants. He loves the freedom that working for himself provides, as well as the ability to control his income. But in the eyes of the government, John is not a desirable borrower. Not only is this incredibly frustrating for John, it’s discouraging.
The message that is being communicated is that there is only one right way to qualify for a mortgage which means, according to Uncle Sam, being someone else’s employee. So what is John to do? The great news is that John does not have to compromise his self-employed lifestyle just to become a homeowner. This is where a Non-QM (remember: Non-Qualified Mortgage) loan comes into play.
Our proprietary specialized financing product (a Non-QM loan) allows John to qualify for a mortgage loan in a more straightforward, common sense way—bank statements. If you’re able to show you’ve got the ability to pay for a home, we believe there shouldn't be any obstacles standing in the way of your homeownership goals.
Our proprietary Specialized Financing (Non-QM) loan is a great fit for someone who:
- Requires a loan between $50K and $3 million
- Has a Debt to Income (DTI) Ratio of up to 55%
- Possesses one year of verified income
- Has a lower credit score (as low as 620)
- Had a change in household income
- Had a change in employment status
- Owns a non-warrantable (non-agency) approval condo property
- Was affected by the pandemic and entered into a forbearance program. You only have to have exited from the forbearance program for one day and possess a clean housing history for 12-24 months before entering that program—the traditional model requires you to be out of the forbearance program for a minimum of three months.
On top of all that, we also don’t require homeowners insurance with less than 20% down and if need be, we allow interest-only payments and a 40-year loan versus a traditional 30-year loan.
The main point here is that if you’re self-employed like John, whether that means you’re a freelancer, you own and run a small business, you’re an independent contractor—essentially, you’re not a traditional W2 employee—then there are ways for you to get into a home without the government telling you you’re not worthy to own the roof over your head. Our goal is to consistently deliver the best possible experience to our borrowers and showing them what’s possible.