What is the self employed
Bank statement mortgage program
The self employed mortgage program, also known as the bank statement mortgage program, is a set of mortgage requirements designed by alternative lenders, for business owners. Under the self employed mortgage program, self employed home buyers and home owners can qualify using their business bank statements as income, rather than tax documents.
Self Employed Mortgage Programs and Rates Explained
Self Employed Mortgage For Home Buyers
Business owners seeking mortgage financing under the self employed mortgage program must provide 3 to 6 months of their business bank statements as income confirmation. Generally, lenders will annualize (take the average of each month and multiply by 12 to determine the annual income) the last 3 to 6 months of deposits.
For purchasing a home, a minimum of 20% down payment is required under the self employed mortgage program.
Self Employed Mortgage Refinance
Similar to the requirements for purchasing under the self employed mortgage program, under the self employed mortgage refinance program 3 to 6 months business bank statements will be required to annualize the business cashflow, to determine the annual income.
The maximum loan to value (LTV) for self employed refinancing is 80%.
Self Employed Mortgage Rates
Self employed mortgage rates for both purchasing and refinancing start from alternative lenders start from 2.79%.
To determine the interest rate for a self employed mortgage, lenders factor various things such as credit score, and debt servicing ratios (gdsr and tdsr). The interest rate may increase if there are credit delinquencies, and if the GDS / TDS ratios are high.