10% Down Los Angeles CA Self-Employed Mortgage Lenders
CALIFORNIA BAD CREDIT BANK STATEMENT ONLY MORTGAGE LENDERS
Los Angeles CA Self Employed business owners and Wage Earners can both qualify- Joint Los Angeles CA Self Employed Mortgage Applicants with 1 wage earner and 1 self-employed business owner can verify income separately, with the self-employed Los Angeles CA Self Employed Mortgage Applicant utilizing 12 or 24 months business or personal bank statements and the wage earner providing paystubs/W-2s we can use both incomes to qualify. The wage earner 4506T should include W-2 transcripts only.
NO TAX RETURN BANK STATEMENT ONLY MORTGAGE LENDERS SUMMARY
- Must Document Proof of 2 years Self Employed!
- No tax return bank statement only mortgage lenders
- 12-month personal or business bank statements
- 24-month business or personal bank statements
- Loans up to $3 million
- Credit scores down to 600
- Rates starting in the 4’s
- Up to 90% LTV on Personal and Business with no MI
- DTI up to 50% considered
- Owner-occupied, 2nd homes and investment properties
- 2 years seasoning for foreclosure, short sale, bankruptcy or deed-in-lieu
- Non-warrantable condos considered
- Jumbo loans down to 600 score
- 5/1 ARM or 30-year fixed
- No pre-payment penalty for owner-occ and 2nd homes
- Seller concessions to 6% (2% for investment)
- Combination of Bank statements and w2 OK!
Los Angeles CA BANK STATEMENT ONLY MORTGAGE LENDERS ANALYSIS
• Eligible deposits from the bank statements should generally be within +/- 10% of the gross income (business accounts) or net income (personal accounts) as shown on the Profit and Loss statement
• Bank Transfers from other bank accounts into the business bank accounts will require conclusive evidence that the source of transfer is business-related income.
• An Income calculated with business or personal bank statement documentation should be consistent with income documented by the borrower on the loan application
• Borrowers income in 1003 should never be used for qualifying, even if it is less than the P&L income calculated above
• Any deposits into a personal account deemed to derive from a source other than the business (rents, SSI, joint account holder wage income, IRS refunds) must be excluded from the bank statement only income analysis and added separately as qualifying income if applicable.
• NSF also know as no n sufficient funds require a borrower Letter of explanation to evaluate that they are not due to financial mishandling and/or indicative of insufficient income
• NSFs should be covered with deposits shortly after they are incurred.
• Unusually large deposits exceeding 50% of monthly income (as defined by Fannie Mae) into personal accounts must be documented and explained via Letter of Explanation and
must be consistent with the business profile. If Letter of Explanation is sufficient, no sourcing required.
• Transaction history printouts are not acceptable.
• Multiple bank accounts may be used.
• Co-mingling of personal and business receipts and expenses in Personal Bank Accounts is not permitted. Evidence of comingling will require the loan to be submitted and qualified as a business bank statement loan.
• If personal bank statements provided reflect payments being made on obligations not listed on the credit report, a thorough analysis must be performed and Letter of Explanation provided from the borrower, as outlined below. Bank statement loans submitted with tax return documentation or transcripts are ineligible.
LOS ANGELES CA MORTGAGE LENDERS DOCUMENT REQUIREMENTS
(1) 12 or 24 months Personal or 12 or 24 months Business Bank statements
Los Angeles CA Self Employed Mortgage Applicants who own more than 3 businesses must use personal bank statements option
Bank statements must be most recent available at the time of application and must be consecutive
(2) Profit & Loss Statement
If submitting personal bank statements, a P&L prepared by the Los Angeles CA Self Employed Mortgage Applicant covering no less than 12 or 24 months is required
The P&L must be signed and dated by the self-employed mortgage applicant.
If submitting business bank statements, a P&L prepared by the Los Angeles CA Self Employed Mortgage Applicant covering no less than 24 months is required
The Los Angeles CA Self Employed Mortgage Applicant is required to provide separate P&Ls for each business being used in qualifying.
The P&L should generally cover the same calendar months as the bank statements provided.
(3) Validation of a minimum of 2 years existence of the business from one of the following: Business License, Letter from Tax Preparer, Secretary of State Filing or
SELF EMPLOYED LOS ANGELES CA PROFIT & LOSS ANALYSIS
• Net Income from the P&L will be used as Qualifying Income for both personal and business bank statements.
• The P&L used for qualifying must be signed by the Los Angeles CA Self Employed Mortgage Applicants.
• Declining Income requires a Letter of explanation to determine if the trend will continue.
• Any amounts on the P&L representing salary/wages paid to the Los Angeles CA Self Employed Mortgage Applicants/business owner can be added back and considered in the net income analysis.
• Expense line items that can be added back to the business net income include depreciation, depletion, amortization, casualty losses, and other losses or Los Angeles CA business expenses that are not consistent and recurring.
• Los Angeles CA Self Employed Mortgage Applicants utilizing business bank statements that own > 50% but < 100% of a business will be qualified at the P&L/AES net income multiplied by their ownership percentage.
• The P&L expense ratio, Gross Income minus Net Income, divided by Gross Income, should be reasonable for the profession.
Example: A home-based sole practitioner therapist/consultant can be expected to have a low expense ratio, while a retail Los Angeles CA business that has a full staff of employees and relies heavily on inventory to generate income will have a high expense ratio.
• If the file does not contain a CPA prepared P&L, steps must be taken by the underwriter to evaluate the reasonableness of the expenses listed by the Los Angeles CA Self Employed Mortgage Applicants.
• This requires the Los Angeles CA Self Employed Mortgage Applicants to provide a business narrative which includes detail related to the size/scope and operating profile of the business, including the following:
o Description of the Los Angeles CA Business/Business Profile
o Location & Associated Rent o Number of Employees / Contractors o Estimated Cost of Goods Sold (Does
business involves the sale of goods or just services?)
o Materials/Trucks/Equipment o Commercial or Retail client base? o Business Analysis
• Business Expenses listed on a Los Angeles CA Self Employed Mortgage Applicants prepared P&L should generally relate to the information provided below.
Age of Documents Self Employed Mortgage Lenders Requirements
Credit Report/Credit Documentation: 90 days old at the time of closing Income and Asset Documentation: Dated within 90 days of closing Title Report/Title Commitment: Dated no later than 60 days prior to closing
Appraisal Requirements For Los Angeles CA Self Employed Mortgage Lenders
Full Interior / Exterior appraisal required. Fannie Mae/Freddie Mac Forms 1004/70, 1025/72, 1073/465 or 2090 must be used. All Fannie Guidelines apply to
the appraisal process and value determination, in addition,n an Appraisal Management Company must be utilized for appraiser selection. The Appraisal should be dated no more than 120 days prior to the Note Date. After a 120 day period, a new appraisal is required. Re-certification of value is
not acceptable. Minimum Square Footage 800 Sq. Feet Not eligible: Properties for which the appraisal indicates condition ratings of C5 or C6 or a quality rating of Q6, each as determined under the Uniform Appraisal
Dataset (UAD) guidelines. GreenBox will consider if issue has been corrected prior to loan funding with proper documentation. A 5% reduction in LTV/CLTV will be required for all properties identified to be in a declining market as designated by the appraiser.
Serving All Los Angeles, CA