Buying your first house can be quite a demanding task that requires thorough planning and careful research. This is because when you buy a house, you need to understand that it is a long-term investment with many ups and downs. If you are a self-employed buyer then you might face more hurdles than traditional 9 to 5 job holders. Conventional lenders such as credit unions, banks and mortgage providers often ask for regular proof of income, W-2s, and pay stubs. These traditional documents are harder to come by for self-employed buyers due to their unique source of income. But no need to worry as you might be eligible for a no tax return mortgage. The journey for homeownership can vary from buyer to buyer but regardless, you need to take certain factors into consideration to make it easier.
Let’s take a close look at how you can use other options such as your credit score, debt and repayment management, bank statements, and your unique forms of income to secure loan options that suits your needs.
3 Factors to Consider When Applying for No Tax Return Mortgage:
When it comes to securing a no tax return mortgage, you don’t have to worry about submitting your tax returns. This is due to the fact that many self-employed individuals such as you typically do not have traditional income documents. The no tax return mortgage typically has higher interest rates and sometimes requires larger down payments.
- Use Your Bank Statements as Supporting Documents:
Due to your unique employment history, you might face a greater risk of rejection from traditional lenders. But did you know that you could use your bank statements to secure better terms for no tax return mortgage? Well, now you can! It has been reported that a significant number of self-employed homebuyers have successfully secured mortgages with bank statements instead of tax returns. Whether you are a business owner or a freelancer, many lenders will now accept your bank statements instead of traditional income documents. Therefore, to ensure better terms on no tax return mortgage, you might have to show your personal bank statements from the past 2 years.
- Secure Better No Tax Return Mortgage Terms with Your Credit Score:
Your credit score, credit history and credit report play a vital role in getting better terms and conditions on a no tax return mortgage. Many lenders use your credit score as the set metric to judge your credibility for lending you the mortgage amount. Most lenders will readily approve your no tax return mortgage if you have a FICO score of more than 700. With a not-so-good credit score, you might still be able to secure a self-employed loan if you have a large down payment ready along with a low Debt-To-Income (DTI) ratio.
- FICO score of 580 for Federal Housing Administration (FHA) Loan.
- FICO score of 620 for Conventional Loans such as Fixed Rate Loads and Adjustable-Rate Loans.
- 660 credit score for Jumbo Loans
Before you apply for no tax return mortgage, it is always a good idea to delay it for a couple of months. This gives you ample time to further improve your credit score. You should reach out to a reliable mortgage lender such as Dream Home Mortgage to manage your finances.
- Unique Source of Income for Securing Your Loan Plan:
The reason so many Americans are shifting to self-employment is because it offers more earning potential along with flexibility. As a self-employed individual, you are in charge of your schedule and working hours. This allows you ample space and time to earn from multiple sources. You can use all these income streams to your advantage. These streams could include:
- Freelancing for Gigs
- Social Security Benefits
- Rental Income from Your Properties
- Potential Investment Dividends
- Alimony or child support
You can also secure a no tax return mortgage by depositing a 3% down payment for the house.
Where To Get More Information Regarding No Tax Return Mortgage?
Due to the ever-going number of self-employed individuals, the need for special loan options catering to the needs of such buyers is increasing. Therefore, you don’t need to compromise your unique likelihood to conform to traditional loans. You can now apply for no tax return mortgage as it will suit your financial background. Just make sure that you have all the required documents ready beforehand when applying for no tax return mortgage. If you want more information about this mortgage option then you should book a free 30-minute session with Dream Home Mortgage. They are also hosting a webinar on Thursday, October 24, 2024, at 7:30 pm (central time). The webinar will cover the topic “Real Estate Insider: First Homes, Refinance Secrets, Global Investments & Rates,” which can be quite helpful for you as a first-time homebuyer. So, what are you waiting for? Register now!
