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.

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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

Malcolm@ServiceYouCanTrust.com
Web site

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