Michigan Mortgage Solutions for Self-Employed Borrowers
Self-employed individuals face unique challenges when it comes to obtaining a mortgage. Traditional lenders often require a W-2 income history, which can make it difficult for self-employed borrowers to qualify for a mortgage. However, there are Michigan mortgage solutions available that cater specifically to self-employed borrowers. In this post, we’ll explore some of the options available.
- Bank Statement Programs
Bank statement programs allow self-employed borrowers to use their bank statements as proof of income, rather than a traditional W-2. These programs typically require borrowers to provide 12-24 months of bank statements, and lenders will use the average monthly deposits as the borrower’s income.
- Asset Depletion Programs
Asset depletion programs allow self-employed borrowers to use their liquid assets to qualify for a mortgage. These programs take into account the borrower’s liquid assets, such as stocks, bonds, and retirement accounts, and use a formula to determine the borrower’s monthly income based on those assets.
- Non-QM Loans
Non-QM (non-qualified mortgage) loans are designed for borrowers who don’t meet traditional mortgage lending criteria. These loans can be a good option for self-employed borrowers who have irregular income or credit issues. Non-QM loans often have higher interest rates and fees than traditional loans, but they offer more flexible underwriting guidelines.
- FHA Loans
FHA (Federal Housing Administration) loans are government-backed loans that require lower credit scores and down payments than traditional loans. FHA loans can be a good option for self-employed borrowers who have lower credit scores or limited down payment funds.
- VA Loans
VA (Veterans Affairs) loans are government-backed loans designed for active-duty military members, veterans, and their families. VA loans require no down payment and have more lenient credit score requirements than traditional loans. Self-employed veterans can qualify for VA loans based on their income from self-employment.
Conclusion
Self-employed borrowers in Michigan have options when it comes to obtaining a mortgage. Bank statement programs, asset depletion programs, non-QM loans, FHA loans, and VA loans are just a few of the mortgage solutions available. It’s important for self-employed borrowers to work with a lender who understands their unique financial situation and can help them navigate the mortgage process. By exploring these mortgage solutions and working with the right lender, self-employed borrowers can achieve their dream of homeownership.
