SELF-EMPLOYED SECOND MORTGAGE
USE YOUR BANK STATEMENTS TO QUALIFY FOR SECOND MORTGAGE !
What is a Self Employed Second Mortgage?
A Self-Employed Second Mortgage is a type of second mortgage where borrowers can
qualify using personal or business bank statements and is ideal for self-employed
business owners, 1099 contractors, freelancers, and retirees who take deductions on
their taxes, ultimately reducing their net income or taxable income to qualify.
How much can I Borrow on a Self
Employed Second Mortgage?
The amount you can borrow with a second
mortgage depends on the remaining equity
value of your home, minus the 1st mortgage
you owe. The amount of the second mortgage
can vary, but between 65%-100% of the
equity is a good starting point.
Benefits of a Self Employed Second Mortgage?
Borrowers can use a second mortgages to finance large purchases such as a new
vehicle, second home, down payment of an rental income investment property,
consolidate debt, pay for their child’s college education, renovate their home or who
just need cash.
How do I qualify for a Self Employed Second Mortgage?
To qualify, your income is calculated by adding up all the deposits in your business
and/or personal account for either a 12 or 24-month period, and then dividing the
total by the same number of months. This method is very effective because it allows
their income to be calculated based on gross deposits. It is important to note that the
final qualifying income for buisnesses deposits is less than direct personal deposits for
Is a Self Employed Second Mortgage the same as a Stand Alone
YES! Usually a Stand Alone Second are advertised using tax returns to qualify not
bank statement deposits. At 1st Florida Lending, we do offer both Bank Statement
Deposit and (“full doc stand alone second mortgages”) using gross tax return and W2
income at a lower rate.
Self-Employed Second Mortgage Loans are popular with borrowers listed below
Qualifying for a Self-Employed Bank Statement Loan
Bank Statement Loans are utilized by a wide range of self-employed professionals, including
Business owners, Freelance employees, Consultants, Contract workers, Independent
contractors, Sole proprietors, Online retailers, Economy workers, Realtors, Entrepreneurs and
many other types of self-employed people, etc... Being self-employed it can be difficult to obtain
a mortgage. The facts are that most self-employed would agree that their tax returns don't really
show their true income as many tend to write off many expenses over that a W-2 wage earner.
Regardless of what you make for income, tax write-offs and deductions reduce your taxable
income that can affect your debt-to-income ratios. As a result, your net taxable income (after
deductions) may disqualify you for a traditional mortgage for purchasing and/or refinancing !
Q. How do we calculate income utilizing personal bank statements or business bank
Personal Bank Statement Loan: Income received for your goods and/or services is payable
to your personal name and deposited into your personal bank account.
Business Bank Statement Loan: Income received for your goods and/or services is payable
to your business name and deposited into your business bank account.
Determining Qualifying Income
We use total bank statement deposits to establish a monthly qualifying Income. Eligible
income is calculated differently between a personal bank statement and business bank
Personal Bank Statement Loan: We count 100% of your deposits which is utilized in
Business Bank Statement Loan: : We count up to 85% of your deposits which is utilized in
Permanent Resident Aliens
Non-Permanent Resident Aliens
Minimum Loan Amount $200,000
Max Loan Amount $1,000,000
Irrevocable Trusts or Land Trusts
Qualifying Income Documentation
Full Doc - 1 Year Tax Returns
Stated - 12 months Bank Statements
Cash out may be used for reserves
No Gifts of equity allowed
Eligible Property Types
Primary Home: No reductions
2-4 Multi Family Unit
Condos: FNMA Warrantable
Non-Warrantable Condo ( case by case
Ineligible Property Types
Rural/Ag or Vacant Land
Condition C5 or C6
AMC Appraisal Only