Scott Smith
NMLS # 1634279
813-991-1166 Office
813-260-0778 Text
Mortgage Broker
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Many mortgages are qualified mortgages. This means these mortgages have a limit on points and fees and legal protections for the lenders. Lenders are required to follow the rules set by the Consumer Financial Protection Bureau (CFPB) when they offer borrowers qualified mortgages. One of these rules is that they must verify income, and they use tax returns to do that.
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Tax returns may not reflect a self-employed person’s actual income. This is because self-employed borrowers usually deduct business expenses. This lowers their tax burden and makes their income look lower than it is. Lenders recognize that tax returns may not be the best way to measure borrowers’ income. Lenders offer nonqualified mortgages to help address this issue.
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Lenders still want to make sure borrowers can repay their mortgages. They use bank statements, 1099's and Profit & Loss statements to verify income instead of tax returns with these types of mortgages. That’s why some lenders call these Non Qualified Mortgage loans, making your homebuying process a little simpler. If you’re not sure what would work best for you, contact me to discuss.