Posted on: 08th Mar, 2007 10:33 am
what guidelines lenders follow while looking at employment and income of a self employed person and also please mention the kind of documents i would have to show if i have a sole proprietorship business.
Hi Millidge,
Welcome to Mortgagefit discussion board.
A lender would normally require you to have:
Thanks
Blue
Welcome to Mortgagefit discussion board.
A lender would normally require you to have:
- 2 years of self employment. Some lenders would accept less than 2 years also if you had previous employment of at least 2 years or a combination of formal education or training in a related occupation and 1 year's employment. But any self employment which is for a period of less than 1 year generally will not be acceptable by lenders.
- Twenty five percent or more ownership rights in a business.
- 2 years of minimum average income for determination of your qualifying income. Such a process is followed to even out the variations common to income levels of a self employed borrower.
- Good prospect of growth and stability in your business field which would help you in meeting your loan obligation in the long run.
Thanks
Blue
You have asked about the documents that need to be provided for a sole proprietorship business.
Lender would require you to provide Form 1040 with all applicable schedules attached along with it, Schedule C (Profit and Loss from business), Schedule D (Capital Gains and Losses), Year-to-date profit & loss statement and balance sheet.
Lender would require you to provide Form 1040 with all applicable schedules attached along with it, Schedule C (Profit and Loss from business), Schedule D (Capital Gains and Losses), Year-to-date profit & loss statement and balance sheet.
Thanks for the help, please if possible also give some information on what are siva and sisa loans.
"please if possible also give some information on what are siva and sisa loans"
SIVA is for Stated Income Verified Assets Loan and SISA stands for Stated Income Stated Assets Loan.
SIVA loan approval is based on your stated income, credit history and verified liquid assets such as stocks, bank accounts, bonds, etc. While in SISA loans assets are not verified. You only state your income and assets on the application. This type of loan may have higher interest charged as the assets are not verified.
David
SIVA is for Stated Income Verified Assets Loan and SISA stands for Stated Income Stated Assets Loan.
SIVA loan approval is based on your stated income, credit history and verified liquid assets such as stocks, bank accounts, bonds, etc. While in SISA loans assets are not verified. You only state your income and assets on the application. This type of loan may have higher interest charged as the assets are not verified.
David
If you go with a SIVA or SISA type loan, typically you would not need to provide a 1040, Schedule C, or other tax information. However, you would still need to provide a copy of your business license, a letter from your CPA, or something of that nature to verify the length of time in business.
Also, be aware that the guidelines on these types of loans have been changing dramatically over the past couple of weeks. And they are getting tighter for everyone.
8)
Also, be aware that the guidelines on these types of loans have been changing dramatically over the past couple of weeks. And they are getting tighter for everyone.
8)
If you go with a stated deal, which it will probably be, you will need an accountant's letter / CPA Letter.
Hi Millidge,
The State Income, Verified Assets loan is offered to borrowers having poor as well as excellent credit. The minimum credit score for qualifying for such a loan is 500.
In most cases, the credit report of a borrower may reflect a 90 day late payment. In addition, the borrower should have minimum of 2 months of monthly payments (PITI) on principal, interest, tax and insurance as the cash reserves. But in order to qualify for a higher loan amount, one should have at least 6 months of monthly PITI payments as cash reserves.
Thanks,
Sara
The State Income, Verified Assets loan is offered to borrowers having poor as well as excellent credit. The minimum credit score for qualifying for such a loan is 500.
In most cases, the credit report of a borrower may reflect a 90 day late payment. In addition, the borrower should have minimum of 2 months of monthly payments (PITI) on principal, interest, tax and insurance as the cash reserves. But in order to qualify for a higher loan amount, one should have at least 6 months of monthly PITI payments as cash reserves.
Thanks,
Sara