We all know we need income for a mortgage. The type of income needed on a mortgage is always good to know. Most lenders take one form of self-employed income or another. It all depends on which lender has a certain appetite for your self-employment.
There are 3 different types of Self Employment income when it comes to borrowing money on a mortgage.
- Sole Proprietor
- Partnership
- Corporation
All these types of income above can be used for your mortgage approval, but it does depend on what type of mortgage you are trying to obtain.
Triple-A Lending
- For Insured Mortgages, we do not use your “gross income”. We can only use what you net after you deduct your expenses. Generally speaking, we can multiply this net number by 15% to increase your net income. Please note: Insured Mortgages apply to purchases only. In order to increase the allowable 15% gross up, a Broker would need to look at Full Document Stated Income.
Alt-A Lending
- With this type of lending, we can look at more numbers, rather than just gross and net income. We can work within your gross self-employed income, gain a more granular understanding of your business expenses, and increase your income on file. We would need bank statements, and match up your bank account. This applies to purchases/refinances as you need 20% equity in your home.
B Lending
- With this type of lending, we can look at more numbers, rather than just gross and net. We can work within your gross, gain a more granular understanding of your business expenses, and increase your income on file. We would need bank statements, and match up your bank account. To learn more about B Lending – Click Here
- Both the B-Lending and the Alt-A Lending programs here are called Stated Income.
Private Lending and M.I.C.
- These types of lenders want an overview and do not go into details about your account. They will however check if you owe Back Taxes.
