Traditional Mortgage

A “traditional mortgage” refers to a mortgage with borrowers who qualify using W2’s, paystubs or tax returns.  In the mortgage securitization world, it’s also known as a qualified mortgage.

A traditional mortgage for a self-employed person is defined as a person who has at least 2 years of tax returns showing business income. Either thru a schedule C or a K-1 or some other common corporate structure. Unlessbank statement loans, home loans for self employed, mortgage loans for self employed you’ve been in business for five years,  you’ll need to provide the most recent 2 years of filed tax returns. These returns are analyzed by an underwriter who will determine the income used to qualify you for a mortgage.   With this qualifying method, conforming conventional loan limits apply.

Many self employed borrowers can qualify for a Traditional Mortgage, but there are also many who do not qualify. There are other loan options available for these borrowers.

Most self employed people have control over their deductions or expenses which can lower their adjusted gross income (AGI), or they have a business that has a high expense factor.  This can lead to lower net income and create a situation where they can’t get a mortgage for the amount they need.

home loan for self employed borrower, tax return home loan, bank statement home loan, cash flow home loanAlternative types of mortgage loans may use deposits from bank statements as income, income from assets (like an IRA or 401K) or income from rental properties.  These types of mortgage products are reserved for self-employed people only.

The team at Integrated Lending Group is highly knowledgeable about the unique mortgage needs of California business owners and self-employed borrowers. They have over 20 years of experience finding the best loans for California home owners.

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