At Skyridge Lending, we have many options for people that are self-employed. We understand and evaluate the documents available to get you the best deal for your situation. With most programs we can add back things like depreciation, some of the mileage expense, amortization, as well as remove certain one time expenses from time to time to help get the qualifying income up higher. We understand that as a self-employed person you are typically writing off as many things as possible to pay the least amount you can on taxes each year.
Most lenders and programs look at a two year average for income. In cases where the most recent year is considerably lower income then they won’t count it all. There are times when the income is lower because it was planned or a business had new expansion expenses. We understand that and have some options that go off of your most recent tax year for your income, especially if you have been self-employed for over 5 years.
At Skyridge Lending, we have several different asset for income programs available. Assets for income can be dividend income, liquid funds under management, retirement payments from assets under management, or just funds in a bank account. There are a few different ways to calculate income from these sources depending on which program you are going with. Some options take the total funds available and divide by 120 months to give you an income number. Others take the total available and if it is more than your loan amount, you qualify. There are several different variations of this option for income and they do change periodically so give us a call today to discuss the specific details of your situation.
At Skyridge Lending, we have several bank statement options for income. With a personal account, we can usually allow 100% of the deposits over a 12 or 24 month period depending on the program and then divide that number by the number of months to have an average monthly total income amount. With a business account, we can usually allow 50 to 75% of the deposits over a 12 or 24 month period depending on the program and then divide that number by the number of months for the average monthly income. In cases where someone only owns 50% of the business then you would start with 50% of the total deposits and then use 50 or 75% of those deposits, again depending on the program. We also do have a one month bank statement program. This option allows for the income of just the previous month as the monthly income for the loan approval. Keep in mind that bank statement loans are considered non-qualified mortgages and aren’t backed by any of the government agencies at this time. Because of this they are usually 1 to 2% higher in interest rate than the standard market and have higher closing costs. They are more flexible with credit history and other aspects of qualifying but can take longer to get processed and closed depending on how many statements are being used and other details involved for the transaction.
We have several different program options for rental property and investment property loans that go off of the rent roll for the property and look at the DSCR (debt service coverage ratio) to calculate the income. With these loans the borrower(s) personal income is not taken into consideration so the loan is qualified just off of the property rent rolls and/or appraisal information regarding the property rent.