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What If Am Self-employed?

Lenders sometimes see the self-employed as high risk borrowers.  As a general rule, if you own 25 percent or more of the business which generates your income, you are self-employed.

Lenders want to make sure that your business has maintained a steady income for the past two years.  In order to determine this, lenders require that you submit:

• Federal individual tax returns, completed and signed, from the last two years
  
  
• If the business is a corporation, subchapter S corporation or a partnership, you will need to submit a signed and completed federal tax return for the entity.  A business credit report will then be order.
• A year-to-date profit and loss statement for the period ending within 90-120 days of closing (It may not be needed if the corporate or individual returns are up-to-date.)
• Because businesses often fail after the first year, lenders will be especially hesitant to lend to you if your business hasn't been established longer than that. The more established your business is, the easier it will be for you to qualify for a loan.

However, if you are able to put 20 - 25 percent down on the house, you will qualify for a loan with relative ease.