The White House is feeling pressure to start doing more for our Veterans. So theyve started an initiative asking the Fab-5 to scour through their databases and find those VA deals where it would make sense to do a streamline refinance. Well it got us thinking, why should the Fab-5 be the only lenders out there doing this? Why dont you? Its easy to figure out, easy to make the call and easy to do the transaction and to top it all off, it helps the Vets! We know refinances are kind of dry, but, think about this. Most lenders fish for refinances via mail and email. How about some good old phone calling? A little ground work can go a long way toward getting you more clients..
VA Interest Rate Reduction Refinancing Loans, also known as VA IRRRLs, feature no VA-required appraisal or credit check. In cases where the lender does not require a credit check, the same underwriting information used to process the original loan would apply for the VA IRRRL. Therefore, the self-employment issue wouldnt be a factorunless the lender requires the credit check.
In such cases, the self-employed borrower may be required to furnish additional paperwork to show that being self-employed is a viable source of steady, reliable income.
What kind of documentation might the lender need? Profit and loss statements, tax documentation, business plans, any paperwork that can show the ebb and flow of the borrowers business and what kind of sustainable income is derived from that business.
Self-employed borrowers do have a tougher time with this paperwork in circumstances where the business is young and there isnt much data for the lender to examine. A borrower who has been self-employed for some time would have an easier time showing verifiable income if the business income is sustainable.
Borrowers who have fallen on hard times in the business world may need to give themselves more time to show dependable income once their business is back on its feet, so to speak.
At the end of the day, its the lenders job to make sure the borrower can afford the loan being committed to on the VA loan application. Those who can show, with the right paperwork, that being self-employed permits them to do just that will find an easier time with the VA loan process.