Self-Employed and Can’t Get a Mortgage? The Loan Type May Be the Problem
Alternative documentation loans can qualify borrowers with strong cash flow when tax returns understate income, lenders said.
- Conventional mortgage documentation requirements create dead ends for self-employed borrowers, as lenders rely on tax returns that understate actual cash flow through write-offs and deductions.
- Daniel Norris, a wholesale account executive at California-based American Heritage Lending, identifies broker assumptions as the primary barrier, with many dismissing non-QM solutions by stating, "I just take my borrowers conventionally."
- Bank statement loans allow lenders to evaluate actual deposits rather than tax returns. "Take a look at their bank statements," Norris said, noting this provides a more accurate picture of earning power.
- Beyond self-employed buyers, non-QM products serve foreign nationals and purchasers of non-warrantable condos, with asset-depletion and debt-service-coverage-ratio loans providing additional options.
- Non-QM lending has expanded in recent years, though these loans typically carry higher interest rates and fall outside the Consumer Financial Protection Bureau's Qualified Mortgage designation, requiring cost-benefit analysis.
9 Articles
9 Articles
Self-Employed and Can’t Get a Mortgage? The Loan Type May Be the Problem - The Mexico Ledger
Many self-employed borrowers who are told they do not qualify for a mortgage are not actually unqualified. They are applying through a loan type that measures income in a way that works against them. Conventional mortgages rely on tax returns, and for self-employed borrowers, tax returns are designed to minimize taxable income. That creates a gap between what a borrower actually earns and what a traditional lender sees on paper. Daniel Norris, a…
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Self-Employed and Can’t Get a Mortgage? The Loan Type May Be the Problem
Many self-employed borrowers who are told they do not qualify for a mortgage are not actually unqualified. They are applying through a loan type that measures income in a way that works against them. Conventional mortgages rely on tax returns, and for self-employed borrowers, tax returns are designed to minimize taxable income. That creates a gap between what a borrower actually earns and what a traditional lender sees on paper. Daniel Norris, a…
Self-Employed and Can’t Get a Mortgage? The Loan Type May Be the Problem - Seward Independent
Many self-employed borrowers who are told they do not qualify for a mortgage are not actually unqualified. They are applying through a loan type that measures income in a way that works against them. Conventional mortgages rely on tax returns, and for self-employed borrowers, tax returns are designed to minimize taxable income. That creates a gap between what a borrower actually earns and what a traditional lender sees on paper. Daniel Norris, a…
Self-Employed and Can’t Get a Mortgage? The Loan Type May Be the Problem - Hillsboro Sentry Enterprise
Many self-employed borrowers who are told they do not qualify for a mortgage are not actually unqualified. They are applying through a loan type that measures income in a way that works against them. Conventional mortgages rely on tax returns, and for self-employed borrowers, tax returns are designed to minimize taxable income. That creates a gap between what a borrower actually earns and what a traditional lender sees on paper. Daniel Norris, a…
Self-Employed and Can’t Get a Mortgage? The Loan Type May Be the Problem - Stateline Publications
Many self-employed borrowers who are told they do not qualify for a mortgage are not actually unqualified. They are applying through a loan type that measures income in a way that works against them. Conventional mortgages rely on tax returns, and for self-employed borrowers, tax returns are designed to minimize taxable income. That creates a gap between what a borrower actually earns and what a traditional lender sees on paper. Daniel Norris, a…
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