Self-employed borrowers have a new mortgage option

Individuals who work for themselves–normally those who file Schedule C with their federal income tax returns–have had a tough time getting approval either for a new mortgage or refinancing.

But now there is an option for buyers of single-family homes, condos or co-ops who are able to make a downpayment of at least 30 percent, according to lender David Bersak of Guaranteed Home Mortgage.

The requirements to purchase a condo or single-family home are these:

  • Proof of two years’ self-employment;
  • Sufficient cash in a bank account, not including certificates of deposit, implying income of twice that amount;
  • Enough activity–deposits and withdrawals–to demonstrate that the borrower actually makes money;
  • Yearly income of approximately the balance in the bank account.

Co-op borrowers have the following requirements:

  • Convincing frequency and amount of deposits over 12 months;
  • Income that will be calculated as an average of the deposits in the preceding year minus any internal transfers;
  • Therefore, no transfers among bank accounts to bring up total of deposits.

Bersak says the transaction costs and interest rate will be the same as for any other borrower.

Subscribe by Email

Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201
Web site

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s