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How Do I Get a Mortgage Loan in SoCal If I’m Self-Employed?

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California is home to countless self-employed individuals, who love the flexibility of working for themselves. While there are many perks of being self-employed, when it comes to getting a mortgage loan for a home in SoCal, sometimes the process seems like an uphill battle.

But rest assured, you can absolutely qualify for a mortgage loan as a self-employed individual in SoCal, you just need to be prepared for the process. Here is what you need to know about getting a mortgage loan when you work for yourself. There are two main types of loans that self-employed individuals will use to purchase a home.

The most common is a bank statement loan. By providing 12-24 months of bank statements, lenders are able to verify your income. These loans for self-employed workers in SoCal generally have better rates, than the plain stated income loan.

The plain stated income loan for self-employed individuals in SoCal will generally have higher interest rates than the bank statement loan, and generally have higher rates than conventional loans as well. Your options with a stated income loan are a little limited, as a lot of lenders still don’t offer them.

Most of the time loans for self-employed borrowers will require that you have more reserves than a W2 employee. Reserves are things like other investments, liquid capital, and products in your financial portfolio. In addition, you should prepare to provide a significant down payment, as most loans for self-employed individuals require a lower Loan to Value (LTV) amount in order to qualify. As a self-employed person, it’s in your best interest to put down as much as you can on a house, townhouse, or condo in SoCal.

You’ll also want to make sure you’ve begun gathering documentation including your tax returns, your business account statements and your personal account statements. Plan on having documentation for the last two years.

At Summit Lending, we love working with entrepreneurs, self-employed individuals, and small business owners. We are here to help you purchase your first home when you are ready. Our team of top-reviewed Orange County mortgage brokers have worked with countless self-employed borrowers to secure great mortgage loans at the best rates available. Summit Lending has worked with self-employed home buyers from Orange County, San Bernardino County, Riverside County, San Diego County, Los Angeles County, and everywhere in between for more than 20 years. Contact us today to start the loan approval process. We can be reached at 888-451-9006, or click here.

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