Self-employed borrowers have struggled to qualify for mortgages with tightened lending rules over the last few years. This has made a lot of people unable to qualify. As lenders face an overall decrease in refinancing originations due to higher interest rates, they are looking to make up the shortfall in business through purchase applications. Doing so may motivate more lenders to look for ways to increase their share of borrowers.
The self-employed sector may be one major area of growth. The number of self-employed workers in the U.S. is on the rise, increasing to 40.8 million people in 2017. That equates to 31 percent of the private work force. The number of self-employed workers earning $100,000 or more rose nearly 5 percent last year. But their ability to get a mortgage is still challenged due to their nontraditional income status.
Citadel Servicing Corp. is offering multiple options for income qualifications to help more self-employed workers qualify for a loan. One of their areas of qualification includes a one-month bank statement program aimed at self-employed individuals.
“This program was designed for the self-employed borrower with excellent credit who simply doesn’t have time to gather two years’ worth of business and personal tax returns or 24 months of bank statements,” says Will Fisher, senior vice president, national sales and marketing director at Citadel Servicing Corp. “They are putting down a substantial down payment or have an exceptional equity position. Our historical data shows that this borrower can assess and manage their responsibilities.”
Citadel Servicing Corp., which specializes in non-prime loan products, was the first lender to re-enter the subprime market in 2012, HousingWire reports.