Self Employed Sole Proprietor or Owner of LLC with 1 year of self employment: There are a few doctor lenders who will consider a self employed physician with less than 2 years of self employment. You must have filed at least 1 year worth of self employed tax returns. The bank will calculate your income using the previous year’s tax returns along with your current YTD Profit & Loss statement and Balance sheet.
Self Employed Sole Proprietor or Owner of LLC with at least 2 years of self employment: This is the common standard for self employed borrowers accepted by most banks. The lender will want your last 2 year personal and business returns, your current YTD Profit & Loss and Balance Sheet.
2 Responses
My wife and I have an annual income of 110k but a total of student loan debt at 70k with additional debt 10-15k (car loan, credit cards, etc.). My question, is this too high of a debt/income ratio for us to get a first time buyer home loan? Also our down payment percentage probably wouldn’t be too great. We’re wondering if we should pay down debt at a higher rate (our current action) or save more for a down payment?
The debt to income ratio is based on your monthly payment obligation, not your outstanding debt.by paying down revolving debt this would help to improve your credit ratings and lower your debt ratio. For most mortgage programs will requires a 41% DTI or less. On some dr loans the max DTI is 38% This can also be higher based on other circumstances. As an FDIC back institution we do have some lead-way in how we lend.