I had a self-employed borrower call me recently asking for a quote on an interest rate. She said she had been pre-qualified by someone else and just needed an interest rate quote. I asked her to fill out my pre-qualification form anyway and she agreed. It’s a good thing she did. I discovered an obstacle to her loan approval. She was never going to get her loan approved in her current situation, and she was wasting her time making an offer.
Why was she wasting her time?
Because she was only self-employed for six months! The mortgage guidelines say that you have to be self-employed for two years before you can qualify for a mortgage. Six months of self-employment will not work. Twenty four months minimum is the rule. There may be some scenarios where an exception can be made, but that is considered under certain restrictions.
Lenders don’t know their own self-employed guidelines?
It is astonishing that some lenders do not ask sufficient questions to make sure that a buyer is accurately representing their qualifications in a contractual real estate situation. As a result, mortgage borrowers are going to have do the research to make sure that what they are being told is correct.