Both wage earner and self-employed borrowers typically need a two-year track record of documented earnings to qualify for mortgage financing. Whereas wage-earner income is based on employer W-2 earnings, income for the self-employed borrower based on tax return filings.
Lenders use your DTI ratio to compare your total monthly debt to your gross monthly income. This shows the economic burden on your household finances. Debt can include payments on car loans, student loans, and credit card payments, to name a few. The lower your DTI ratio, the better your chances of mortgage approval.
Self-employed borrowers typically need a two-year track record of successful earnings based on income tax returns to apply for a mortgage. Lenders typically average the income if it’s going up and take the lower number if it’s going down. Qualifying with tax returns is often challenging for the self -employed borrower. In such cases we offer a variety of appealing financial alternatives to meet the needs of this applicant.
