Does being self-employed effect getting a mortgage?

It depends…

If the business is making money (comparable to working for someone else) and all those funds are being reported to the IRS, then I would structure your loan like anyone who is a W-2 employee. The customer would have many loan options such as FHA and if the credit score meets the loan program requirement there would be 100% loan options.

If like most self-employed people, you take as many business expenses/deductions as possible to reduced their tax exposure, then we might have to go with a “Stated Income” loan.

What exactly does that mean?

The customer “states” tells me his monthly income
If we went with a “stated income/stated asset” it would also mean they would “state” the funds available for down payment and closing costs.

It also means they will have to make a down payment. Our “best priced” stated income loan will require a 10% down payments and the mid credit scores at 680 or above.

This program only requires one-year in the “business.” Most stated income programs require a 2-year history.

At this time, the program has the street rate as a regular program but does has 1/2 % origination fee, and the mortgage insurance will be roughly 18-20% higher.

This program can be used for 2nd homes (vacation homes not investment property) but requires a 700 credit score on 2nd homes.

Bottom line- it is more important than ever to keep you credit in good shape; plan ahead and save some money.

BOk Mortgage originates more loans in the state of Oklahoma than any other lender. Call me if you are purchasing or refinancing and I will be happy to assist you.

Karen L Heston
Mortgage Banker
(918)488-7353
Toll Free (800)947-2655 x7353
kheston@bokf.com