Self-Employed Guidelines for Getting a Mortgage Approved In Kentucky


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Self Employed Income Guidelines for a Getting a Kentucky Government FHA, VA, USDA Mortgage Loan in Kentucky
  • A borrower is considered self employed if they have 25% or more ownership in a business.
  • Contract or 1099 employees are self employed borrowers.
There are 4 types of self employed business structures:
  • Sole Proprietorships
  • Corporations
  • Limited Liability Company (LLC)
  • Partnerships
Notes:
  • Tax Returns are always required for a self employed borrower. Depending on the business structure, the borrower may have business returns in addition to their personal tax returns.
  • 1099, Sole Proprietorships, and LLC self employed borrowers typically file Schedule C on their personal tax returns.
  • Corporations and Partnerships will file Business Tax Returns in addition to their personal returns. The business returns will include K1’s listing the borrower’s ordinary business income and percentage of ownership.
  • Corporation and Partnerships may also have W2 income in addition to their K1’s.
  • All self employed income is calculated per agency guidelines.
  • Self employed income requires a 2 year history. 
  • Declining self employed income typically cannot be used unless allowed by specific agency or loan program.

 

http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu
 
Joel Lobb (NMLS#57916)
Senior  Loan Officer
 
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
 


Text/call 502-905-3708
kentuckyloan@gmail.com

http://www.nmlsconsumeraccess.org/
Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916 http://www.nmlsconsumeraccess.org/
 
— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

 

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916
 
American Mortgage Solutions, Inc.
10602 Timberwood Circle 
Louisville, KY 40223
Company NMLS ID #1364
 
 

Text/call:      502-905-3708

fax:            502-327-9119
email:
          kentuckyloan@gmail.com
 
 

 

Acceptable Income and Job History for a Mortgage Loan Approval in Kentucky


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Mortgage Underwriters must follow both DU and agency guidelines when it comes to documenting and calculating qualifying income for a loan transaction. Income guidelines may vary slightly depending on the loan program and the borrower’s employment profile. Below are some general tips for W2 income.   
 
Documentation that may be required
Paystub with year to date gross earnings
At least 1 year’s W2
Verbal or full VOE
 
Base Pay:
Salaried and fixed hourly income is calculated by averaging the gross year to date income 
Variable hourly income is calculated by averaging 12 month history
Commission and tip income is calculated by averaging over 24 months
No transcripts are required for salaried, hourly, or less than 25% commission W2 income borrowers
Unreimbursed expenses do not have to be deducted from the gross pay for salaried, hourly, or less than 25% commission W2 borrowers
 
Overtime, and Bonus Income:
Overtime and Bonus can be used as effective income as long as it’s been received for 2 years and is reasonably likely to continue
Periods of less than 2 years may be considered as long as it’s been consistently earned over a period of at least 12 months and there are positive factors to offset the shorter history of receipt per underwriter discretion
Overtime and Bonus income must be documented by a full VOE
Declining overtime and bonus income cannot be used for qualifying income
 
Part Time Income:
FHA loans requires a 2 year history of working multiple jobs
Fannie Mae or Conventional loans will allow less than 2 years as long as it’s been consistently earned over a period of at least 12 months and there are positive factors to offset the shorter history of receipt per underwriter discretion
http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu
 
Joel Lobb (NMLS#57916)
Senior  Loan Officer
 
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
 


Text/call 502-905-3708
kentuckyloan@gmail.com

http://www.nmlsconsumeraccess.org/
Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916 http://www.nmlsconsumeraccess.org/
 
— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.