Dallas Native Voice | Self-Employed Buyer

Mary Beth:         Hi, this is Mary Beth Harrison with Dallas Native Voice, and I’m sitting here with Mortgage Mark (Mark Pfeiffer with Homebridge). I don’t know any other name but Mortgage Mark. That’s just what it is.

Mark:                    It’s all you need to know in mortgage.

Mary Beth:         You know, I have a question of the hour for you. Have a self-employed, uh, borrower. Can we even get him a loan? Okay, ’cause, you know, self-employed people aren’t the best, one, at record keeping. Two, they put so many expenses in there that it often looks like they’re dirt poor when they probably aren’t. So how does that even work in the loan world?

Mark:                    Good question. So the, the normal, air quotes on normal, self-employed person will typically need two years’ tax returns.

Mary Beth:         Okay.

Mark:                    Uh, not always, but most of the time that’s true, and as you-

Mary Beth:         So it’s like a normal loan, then.

Mark:                    A normal loan, but if their expenses are just aggressive ’cause they, they can, by the way-

Mary Beth:         Right.

Mark:                    … they can write off that cell phone that maybe the normal W2 person can’t.

Mary Beth:         That’s right.

Mark:                    So if all those expenses end up being pretty significant to where that bottom line net number doesn’t fit inside the perfect little box-

Mary Beth:         Mm-hmm (affirmative).

Mark:                    … there are programs out there now. So what’s gaining a lot of popularity in the last six to 12 months are bank statement programs. So think of this, if somebody makes 10 grand a month-

Mary Beth:         Right.

Mark:                    … in revenue, right-

Mary Beth:         Yes.

Mark:                    … the deposits coming in-

Mary Beth:         Right.

Mark:                    … that’s what will be used for the income. So if you use a 12 or 24-month, you get better rates if you use a 24-month [crosstalk 00:01:16]-

Mary Beth:         24 months of bank statements?

Mark:                    24 months of bank statements.

Mary Beth:         Okay.

Mark:                    And I can show an average-

Mary Beth:         So you’re showing constant income-

Mark:                    And, and that’s-

Mary Beth:         … coming in, even if it’s not constant. Um, I, I know like ours, is, is random. You might get, you know, [crosstalk 00:01:28]-

Mark:                    We’ve got the summer and the winter, right.

Mary Beth:         Exactly.

Mark:                    You get seasonality to where it’s the summer and people are looking to buy homes for schools, you’ve got the winter where it’s, you know, a little bit-

Mary Beth:         I guess you also don’t mind seeing large chunks of money going in because some people get paid that way-

Mark:                    Exactly right.

Mary Beth:         … whether it’s on a bonus or whatever. Okay, so you’re looking at my one year to two years’ worth of bank statements-

Mark:                    Correct.

Mary Beth:         … and you’re able to go off of that now?

Mark:                    Yes, we actually would not even want the tax returns in that instance.

Mary Beth:         Well, that’s interesting. All right, so they can get a loan off of that. So credit, what … how does that work? What’s the credit score?

Mark:                    So, you will find a lot of in- investors, a lot of mortgage companies will have about 700 minimum, 700-720.

Mary Beth:         Right.

Mark:                    There are … we, we’ve done loans down as far as 660, even.

Mary Beth:         Wow.

Mark:                    So exceptions are there with larger down payments, you know, money in the bank-

Mary Beth:         Okay.

Mark:                    … things that kind of give that lender the warm and fuzzies, like-

Mary Beth:         Right, that it’s going to be okay.

Mark:                    That’s right.

Mary Beth:         That I’m not going to foreclose on this house.

Mark:                    Yeah, this isn’t the Lucy Goose, like-

Mary Beth:         Right.

Mark:                    … you know, the subprime meltdown days, where it’s zero down, no money in the bank. It- it’s gotta make sense.

Mary Beth:         Right.

Mark:                    Again, if somebody’s depositing 10 grand a month into a bank account, you’d hope there’d be some money in the bank thereafter.

Mary Beth:         To pay their mortgage? Right.

Mark:                    You would think and hope.

Mary Beth:         Yes.

Mark:                    Um, so i- i- it again, it’s s- 700-ish would be a good, a good number, but certainly we’ve done in the mid to high sixes.

Mary Beth:         Okay, great. Good to know. So we can get our self employed people a loan, which is good to know. If you want any more information, whether it’s lending, or how to buy a house, or contract information, you know where to find us. You can get us at dallasnative.com or at any social media. We go where you go. Thanks for listening.


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