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Need an Orlando Mortgage and Your Self Employed
June 29th, 2010 4:16 PM
A self employed Orlando mortgage home loan can be a difficult thing to obtain if the borrower has not been self employed for less than 2 years. The majority banks and credit unions would like to see two income tax returns for applicants who work for themselves as proof of income before conceding an Orlando mortgage. Even then, many banks are reluctant to offer a arrangement because of the larger risk connected with self employed people whose job protection is less and whose incomes can fluctuate widely from month to month. Qualifying for a contract to buy a house is difficult for many buyers, but these evils are exacerbated for self-employed buyers. But those who are self employed and want to buy a house can find several options to investigate.

If a potential home buyer has worked for himself for less than two years, one type of self employed home loan choice this person can consider is a no-doc contract, which is one where the buyer does not have to supply the lender with any documentation of income or assets. The drawback of these contracts is the higher interest rate they carry, normally 2 to 3 percentage points above a conventional loan. Still, many Orlando home buyers use this option, knowing that after they have 2 years of tax returns as a self-employed person, they can refinance their contract at a lower, conventional rate.

Maybe the easier choice for self employed home loans is to purchase a house from a seller offering owner financing. Owner financing offers easier qualification requirements, less paperwork, and a faster closing. The drawback is that the purchaser will be working with an individual instead of an Orlando mortgage lender and will most likely have to hire an Orlando real estate attorney to handle the transaction. A prospective buyer can identify owners that offer financing by looking for phrases such as motivated seller and all offers considered in MLS.

Another good alternative is to look for properties advertising assumable transactions. They enable the borrower to take over the payments on the existing contract on the property. FHA assumable loans enable the borrower to simply take over the payments without having to qualify. They are attractive self employed home loans because they often offer the low, conventional interest rates without all the hassles of approval.

The lease option is another self employed home loan option. This contract allows the renter to build equity in a rent-to-own scenario. After the renter has agreed on a purchase price with the seller, the renter moves into the house prior to transfer of the title and makes monthly rent payments to the owner. A portion of the monthly payment is set aside as the down payment. At the end of the lease, the renter can either walk away or apply the funds that have accrued to obtain a contract. This gives both a down payment and time to acquire the 2 years of tax returns needed for a conventional loan.

Finding good deals can seem like a daunting task; however, if a borrower carefully researches and investigates the options, obtaining a new house and financing for a self employed home loan will become a reality.
Posted by Jon Swanson on June 29th, 2010 4:16 PMPost a Comment (0)
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