Self Employed Home Loans For Small Business Owners
If you are looking for a home loan and you are self employed, then you need to start planning. You will need to find the best way to give proof of income, make sure your credit scores are good, and having previous W-2 forms available is a good idea too. It is not impossible to get a self employed home loan, just somewhat difficult at times.
First, if you haven't been working for your self for at least 2 years, this things get even trickier. You should have at least two income tax returns from doing self employed work. Still, many banks will not work with you on getting a loan because there are many more risks involved when you don not have a third party (employer) to back things up.
Let us look at the options. First, there's the no-doc loan. This is a simple solution for the loaner and for you because there are no requirements for any kind of documents involving taxes or income. Of course there's a catch, the interest rates are much higher than other options. Though, after two years (by then you'll have your tax returns) you can refinance to a lower interest rate. So, that is not a bad way to go.
Other than that high interest, easy loan, you can go buy a place from someone that's giving the option of owner financing. It is another easy option as it does not require much paperwork. Another option is to try looking for property that use assumable loans. All you do with this is take up a loan that is already in place. There is no need to qualify or anything like that. The rates are usually fairly low. Finally, you could try a rent-to-own tactic. Each month, a small part of your rent payment is set aside to be used for the down payment. This is probably the best option, because there is not much obligation involved which gives you plenty of time to get some tax returns and to figure out what will be best for you.
Self employed home loans are becoming more and more common as people start moving away from the corporate life to start their own businesses. Luckily, with this new trend, self employed home loans are getting easier to obtain. |
