When determining the appropriate qualifying income for a South Carolina self-employed mortgage applicant it is important to note that business income reported on an individual IRS Form 1040 may not necessarily represent income. No Tax return bank statement South Carolina mortgage lenders use bank statements along with a questionnaire to determine the amount of qualifying income used to purchase or refinance a home.
- Personal Bank Statements: You can qualify using 12 or 24 months bank statements and use Up To 100 percent of deposits if they came from a South Carolina business Bank Account.
- Business Bank Statements: You can qualify with 12 or 24 months of bank statements and count up to 90% percent of the deposits. A South Carolina self employment questionnaire is usually required to determine your income. For example if you are a 1099 salesman with minimal business expenses can use up to 90% of your income to qualify.
- 1099s For Income: Some South Carolina lenders will allow 2 years 1099’s and 2 months recent bank statements along with a bank statement questionnaire to understand your expenses.
- Lease Agreements: As long as the lease agreements are enough to cover the mortgage payments lenders will lend up to 80% loan to value with no income verification needed.
NOTE: Guidelines are general and may vary slightly based upon your self employed situation.
- You must be self employed – Minimum 1 year 2+ years self employed.
- Down Payment – Minimum 10% with better credit. Possibly more if you have a bankruptcy or bad credit.
- Rental History – Bank statement mortgage lenders usually want to verify the most recent 12 months timely rental history.
- Reserves – Minimum 3 to 6 months of future mortgage payments must be in your account after downpayment and closing cost.
- Credit Scores – Some No tax return mortgage lenders may allow scores as low as 550 with at least 35% downpayment.
- Bank Statement Requirements – Most lenders require you to supply 12-24 months’ worth of bank statements
- P&L Statements – It is possible that your lender may require you to provide a P&L statement.
- Assets – Your assets must be fully Sourced or seasoned in the account for at least 30 days.
South Carolina bank statement mortgage lenders that make it easier for South Carolina self employed mortgage applicants to qualify for a mortgage. We all know that it makes sense to deduct expenses to avoid paying excessive taxes. The problem is that oftentimes South Carolina self employed borrowers have taken advantage of every write off available to them and their net income is no longer sufficient to qualify for a South Carolina mortgage. Bank statement mortgage mortgage lenders can approve you using bank statement only to verify your income.
No Tax Return South Carolina Bank Statment Mortgage Lenders will lend on
- Single-family homes
- Condos / Condominiums
- Townhomes / Villas
BANK STATEMENT SC MORTGAGE LENDERS – NO TAX RETURN SOUTH CAROLINA MORTGAGE LENDERS
Take a look at our new 1099 Only SC SELF EMPLOYED South Carolina mortgage or our FL SELF EMPLOYED South Carolina bank statement only loan program for FL SELF EMPLOYED South Carolina self-employed borrowers. Self-employed FL SELF EMPLOYED South Carolina mortgage applicants can provide 12 or 24 months of bank statements to qualify for a FL SELF EMPLOYED South Carolina mortgage with NO TAX RETURNS.
South Carolina Self Employed Mortgage Lenders
If you’re one of the 1000’s of South Carolina self-employed workers that write off to much income to qualify for a South Carolina mortgage? it is now easier than ever to be self-employed get approved for a South Carolina mortgage if you are self-employed and have sufficient income and payment history you can now qualify for a bank statement only South Carolina mortgage. Fannie Mae has relaxed some of their guidelines for documenting self-employed income. Even today South Carolina self-employed mortgage applicants are having trouble betting approve for their South Carolina dream home. Here we have provided the much-needed information to help you get approved for a self-employed mortgage loan using bank statements only to document your income and ability to make the South Carolina mortgage payments.
How Long Must You Be Self Employed in South CarolinaTo Qualify?
Most South Carolina mortgage lenders that provide self-employed mortgage loans want to see proof of at least 2 years business history. Some South Carolina self-employed mortgage lenders only require 12 months personal bank statements but still want proof of stability for at least 2 years. For self-employed South Carolina business owners using business bank statements 24 months business bank statements are required and a South Carolina profit and loss statement signed by the South Carolina business. NO Tax Returns Needed!
SELF EMPLOYED South Carolina MORTGAGE APPLICANTS CAN NOW QUALIFY FOR LESS THAN 2 YEARS SELF EMPLOYED!
Here’s more good news for our Self Employed Mortgage Applicants! Self Employed South Carolina Mortgage Lenders Home Loans, Inc. may be able to approve your self-employed borrowers, even those with a history with less than two years of self-employment. These applicants may qualify for our Fresh Start, Homeowner’s Access and Premier Access products.
When qualifying these borrowers, our underwriters look for:
Self Employed Income Using Tax Returns Make it Hard To Qualify
A borrower’s income is still probably the single most important factor in qualifying for a South Carolina mortgage. For traditional South Carolina mortgage lenders to know what you earn, they will want to see at least the last two-years of a self-employed borrower’s Schedule C from an IRS Form 1040. Schedule C is the tax form that represents the income or loss from your South Carolina business. If income increases between year one and year two, South Carolina mortgage lenders will take an average of the two years. However, if the second year’s most recent income is lower than the first year, South Carolina mortgage lenders are required to use the lower number. With our bank statement only mortgage program this is not an issue because the lender will add u p your most recent 12 or 24 months bank statements and average out your income.
Self Employed South Carolina Mortgage Loans
If you’re going to mortgage your South Carolina home purchase with traditional financing that is conforming to Fannie Mae and Freddie Mac guidelines you will be required to fully document your self-employment income via adjusted income on your 1040 tax returns. It is standard that Fannie Mae will want a full 2 years worth of tax returns to document your net income after expenses. For many South Carolina self-employed mortgage applicants to provide this requirement can be difficult for self-employed South Carolina business owners.
If you’re purchasing a new South Carolinahome or refinancing your existing South Carolina mortgage there is a specific process South Carolina self-employed must go through to get approved for a South Carolinamortgage. Under the old guidelines, self-employed works had difficulty qualifying based on proof of income. This happens for a variety of reasons including how a business is structured most importantly how much income you write off as a self-employed South Carolina mortgage applicant.
South Carolina self-employed workers have no history of paychecks that can be documented because the employer usually pays the w2 employee expenses. They take may take distributions with no regular amount or frequency making qualifying based on income difficult even with bank statements and tax returns. If your business is new and you don’t have documented sources of revenue or even two years of federal tax returns this can make qualifying for a traditional mortgage difficult, if not impossible.
If you have a history of paying yourself from your South Carolinabusiness, Fannie Mae’s guidelines state that your business only needs to have adequate income to support your future distributions. Most South Carolina mortgage lenders will require documentation that your South Carolina business is legitimate and stable. This could be provided in the form of your letters of incorporation or the K-1 filing which highlights your percent South Carolina business ownership.
The underwriting process is still going to be more complicated for South Carolina self-employed mortgage applicants. Fannie Mae and Freddie Mac have similar processes to verify income from South Carolinaself-employment.These requirements follow the ability to repay guidelines to ensure that you have adequate income from South Carolina business owners ability to repay the loan. South Carolina mortgage lenders adhere strictly to these guidelines so that the loans can be sold to Fannie Mae and Freddie Mac.
If you don’t have two years of business tax returns the guidelines you may be able to qualify for a bank statement program using your personal bank statements as an alternative to a conventional mortgage. These types of programs are available from boutique portfolio lenders and offer reasonable rates and fees.
Roadblocks for South Carolina Self Employed Mortgage Applicants
The most common roadblock South Carolina self-employed workers face is proving how much your net income is from the business based on tax returns and deductions. South Carolina self-employed mortgage applicants may have significant cash flow in your business but could be in for a shock when you learn your qualified net income based on tax write-offs and expenses for your business. If you cannot demonstrate sufficient net income from your business it still may be possible to qualify for a bank statement program using income on your personal statements.
South Carolina Business Tax Deductions Lower Documented Income
Running a business as a self-employed worker can be very expensive and often comes with significant tax liability. The temptation can be to lower your taxable income with deductions. These deductions include business expenses for things like equipment, expense accounts, and annual depreciation.
Taking business deductions may save you money on your taxes but it could make it more difficult to qualify for a mortgage. As a self-employed worker, you are qualified for a mortgage based on your net income, not gross income for a traditional worker.
Most self-employed business owners claim as many tax deductions as the law allows which significantly lowers your net income and therefore your ability to qualify for self-employed home loans.
Debt to Income Ratio for the South Carolina Self Employed
Maintaining a low debt to income ratio is important in qualifying for any mortgage loan. As a self-employed worker, your debt to income ratio is calculated differently from traditional workers.
Your debt ratio is calculated by your average net income from the most recent tax returns along with current year income and expenses. In order to be approved for a self-employment mortgage, your debt-to-income ratio cannot be more than 43 percent.
If you’re considering purchasing a new home or refinancing your existing mortgage you might want to consider taking fewer tax deductions to reduce your debt-to-income rate with the highest possible net income.
South Carolina Mortgage Documentation Makes a Difference
The loan process you’ll go through as a self-employed business owner is the same as everyone else. Where it gets sticky is providing your income documentation. The more you have to prove that business income is sustainable and able to pay the easier the process becomes to qualify as a self-employed South Carolina business owner.
Keeping accurate records of income and expenses will make it easier to prove that you are a sustainable business as well as documenting net income which is required for maintaining a favorable debt ratio.
Mortgages for South Carolina Self Employed Business Owners
South Carolina Mortgage lenders generally consider self-employed business owners to be higher risk than those who work for a traditional paycheck. Higher risk Self-employed South Carolina business owners pay more at closing and over the life the loan with higher interest rates. If you’re accepting a higher interest rate when you purchase your South Carolina home you may be able to lower that rate down the road by demonstrating a reliable payment history and refinancing.
How You Structure Your South Carolina Business Matters
There are several different ways to be self-employed and underwriters treat them all differently. The most common business structures include sole proprietorship, partnerships, LLCs and S corporations.
Under a sole proprietorship, your business income is reported on schedule c of your tax return. With a partnership profits in the business are split between partners based on their respective percent of ownership. Limited Liability Corporations are considered pass-through entities for tax purposes. S corporations follow strict guidelines for distributions. Depending on how you structure your business you could potentially pay yourself on a w-2 and avoid the hurdles of a self-employed mortgage completely. Your accountant can help you choose the optimal business structure for your company.
No matter how you choose to structure your business there are steps you can take to maximize your income from self-employment and maintain an optimal debt ratio. All of these factors are under you control and are part of maintaining healthy finances as a self-employed worker.
South Carolina No Tax Return Bank Statement mortgage lenders coverage areas
Columbia South Carolina No Tax Return Bank Statement mortgage lenders 129,272
North Charleston South Carolina No Tax Return Bank Statement mortgage lenders 97,471
Mount Pleasant 67,843
Rock Hill 66,154
Greenville South Carolina No Tax Return Bank Statement mortgage lenders 58,409
Hilton Head Island 37,099
Florence South Carolina No Tax Return Bank Statement mortgage lenders 37,056
Goose Creek 35,938
Myrtle Beach 27,109
North Augusta 21,348
West Columbia 14,988
North Myrtle Beach 13,752
James Island 11,524
Fort Mill 10,811
Port Royal 10,678
Forest Acres 10,361
Moncks Corner 7,885
Fountain Inn 7,799
Tega Cay 7,620
Lake City 6,675
Travelers Rest 4,576
Isle of Palms 4,133
Surfside Beach 3,837
Honea Path 3,597
Folly Beach 2,617
South Congaree 2,306
Ware Shoals 2,170
St. George 2,084
Pine Ridge 2,064
New Ellenton 2,052
St. Matthews 2,021
Calhoun Falls 2,004
Ninety Six 1,998
Great Falls 1,979
Sullivan’s Island 1,791
Seabrook Island 1,714
St. Stephen 1,697
Kiawah Island 1,626
Holly Hill 1,277
Due West 1,247
Fort Lawn 895
West Pelzer 880
Arcadia Lakes 861
Lake View 807
Gray Court 795
Heath Springs 790
Ridge Spring 737
Six Mile 675
Society Hill 563
Cross Hill 507
Briarcliffe Acres 457
Van Wyck 452
Hickory Grove 440
Edisto Beach 414
Atlantic Beach 334
Little Mountain 291
West Union 291
Central Pacolet 216
Mount Croghan 195
Pawleys Island 103
Plum Branch 82