Self Employed to Strike Out on Loans this Year

The demand for private money mortgages will increase this year from self-employed borrowers and those with investment income or fluctuating income. Why? Here are three reasons why these types of borrowers will strike out on obtaining traditional mortgage loans this year:

1.Dodd Frank and the Consumer Financial Protection Bureau (CFPB) have pretty much eliminated the stated income loan products offered by banks before the real estate crisis. This leaves those borrowers who really need these loans, such as self-employed doctors, lawyers, investors, and other business owners, with no viable loan options.

2.Sub-prime borrowers who have credit issues but who also make good income have always relied on sub-prime loan programs from banks. These loans are also nearly non-existent in the post crisis world.

3.Investors who rely solely on income derived from investments, or real estate professionals with high but fluctuating income won’t qualify for traditional, bank loan products in 2014 due to new regulations imposed by Dodd Frank and the CFPB.

With so many banks having eliminated all of their loan programs for these types of borrowers, it’s no wonder that they are unable to obtain mortgages. For this reason, the demand for private money mortgages will remain in high demand in 2014. But what exactly is a private money mortgage?

Any non-bank loan against a residential property can be classified as a private money mortgage. These loans range from 7-9% fixed for up to 7 years. Most borrowers can qualify with just 24 months bank statements and no tax returns. Although the interest rates are much higher for these private money mortgages, it’s a relief for this special group of borrowers to know there will be alternative options for mortgage loans this year. Inquire into our private money mortgages by replying to this discussion.

Posted by Corey Curwick Dutton