Core Insights - Self-employed individuals can qualify for mortgage loans, but they face unique challenges in proving stable and sufficient income [2][9] General Mortgage Requirements for Self-Employed Buyers - Good credit, sufficient income, and stable employment are essential for self-employed borrowers [2] - Minimum credit score for conventional loans is typically 620, while FHA loans can allow scores as low as 500 with a 10% down payment [4] - Debt-to-income (DTI) ratio should ideally be around 36%, but some lenders may accept ratios up to 50% with a strong credit score [5] - Minimum down payment for conventional loans ranges from 3% to 5%, with FHA loans requiring 3.5% and VA/USDA loans having no down payment requirement [6] Income Verification for Self-Employed Borrowers - Lenders require proof of at least two years of self-employment income through tax returns and financial statements [7] - Self-employed income is typically assessed using a two-year average of net income, which is gross revenue minus business expenses [8][16] - Self-employed individuals who minimize taxable income may struggle to show sufficient income for mortgage applications [9] Options for Self-Employed Borrowers - Non-qualified mortgages (non-QM) offer flexible income verification methods but may come with higher interest rates [10] - Bank statement programs allow lenders to average deposits over 12 to 24 months, providing an alternative for those who do not qualify using tax returns [11] Steps to Secure a Mortgage as a Self-Employed Individual - Applicants should provide various documents to prove self-employment and enhance their financial profile, including tax returns, profit and loss statements, and business licenses [12] - Applying with a co-signer or co-borrower with a strong credit history can improve chances of approval [13] - Preapproval from multiple lenders is advisable to compare offers and understand varying income requirements [14] FAQs on Self-Employed Mortgages - Lenders typically require two years of stable income, which can be demonstrated through personal or business tax returns [15] - Net income is used for assessment, providing a clearer picture of available cash after expenses [16] - Mortgage rates for self-employed borrowers depend on credit score, DTI ratio, and perceived risk by the lender [17]

Core Insights - A piggyback loan involves taking out a second mortgage alongside a primary mortgage to finance a home purchase, allowing buyers to avoid private mortgage insurance (PMI) and jumbo loans [2][3][5] Summary by Sections Definition and Structure - A piggyback loan consists of two mortgages: the primary mortgage typically covers 80% of the home price, while the piggyback loan covers a portion of the down payment, often structured as 80-10-10 [2][6][7] Scenarios for Use - Piggyback loans are beneficial for buyers who cannot afford a 20% down payment to avoid PMI, which can cost between $30 to $70 per $100,000 borrowed [3] - They are also useful for purchasing homes exceeding the conforming loan limit, which is $806,500 in 2025 and will rise to $832,750 in 2026 [4] Types of Piggyback Loans - Piggyback loans can be structured as home equity loans or home equity lines of credit (HELOCs), with home equity loans providing a lump sum and HELOCs offering a revolving line of credit [9][10][11] Pros and Cons - Advantages include lower upfront cash requirements, avoidance of PMI, and the ability to stay within conforming loan limits [12][18] - Disadvantages include potentially higher interest rates on the second mortgage, stricter qualification requirements, and the need to pay closing costs for both loans [12][18] Qualification Criteria - Qualifying for a piggyback loan typically requires a good credit score (usually 700 or higher) and a debt-to-income ratio (DTI) of 43% or lower [15][16] Alternatives to Piggyback Loans - Alternatives include FHA loans, USDA loans, VA loans, and conventional loans with lower down payment options, which may be more accessible for some buyers [19][20][21][22] Refinancing Options - Piggyback loans can be refinanced to obtain lower interest rates or consolidate into a single mortgage, but this typically requires a good credit score and sufficient home equity [23]

Core Insights - SoFi is an online mortgage lender and bank that provides a wide range of banking, investing, and borrowing options, including various mortgage products, but its rates are slightly higher than most competitors and it lacks physical locations [1][6] Mortgage Products - SoFi offers several types of home loans, including conventional, FHA, VA, jumbo, and HELOCs, but does not provide USDA or home equity loans [6][9] - The mortgage application process is fully online or over the phone, with no physical branches available [6][21] Key Features - Notable features of SoFi's mortgage offerings include lengthy mortgage rate locks of 91 days, free rate float-downs if market rates fall by 25 basis points or more, and a close-on-time guarantee that provides up to $10,000 in credits if the loan does not close on time [2][6][9] - SoFi allows borrowers to access up to 90% of their home's equity through HELOCs and home equity loans, with a maximum borrowing limit of $500,000 [15] Loan Costs and Rates - SoFi's mortgage rates are reported to be higher than the median, with a score of 2 out of 5 stars for mortgage rates, indicating a higher-than-median mortgage rate of 6.625% [20] - The total loan costs score is 3 out of 5 stars, with average total loan costs reported at $5,275.852 [20] Online Features and Tools - The online platform provides various tools for homebuyers, including mortgage calculators, FAQs, and educational resources to assist in the mortgage process [23][24] - SoFi offers a verified preapproval program that allows potential borrowers to see their interest rates quickly through a soft credit pull [22] Comparison with Competitors - Compared to other lenders like Better Mortgage and Rocket Mortgage, SoFi offers similar loan options and buyer incentives, but lacks some unique features such as rapid closing times and down payment assistance programs [26][27]

Core Insights - Understanding the various types of mortgage loans is essential for potential homeowners to secure favorable terms and conditions, including lower interest rates and down payment options Types of Mortgage Loans - **Conventional Loans**: The most common type, divided into conforming and non-conforming loans [2] - **Conforming Loans**: These loans meet the specifications set by Fannie Mae or Freddie Mac, requiring a minimum credit score of 620 and a down payment of at least 3% [3][4] - **Non-Conforming Loans**: These do not meet the requirements of Fannie Mae or Freddie Mac and may have more flexible terms [5][6] - **Jumbo Loans**: For higher-priced homes, starting above $806,500 in most areas, requiring higher credit scores and down payments [7][8] - **FHA Loans**: Government-backed loans designed for low-to-moderate-income borrowers, requiring a minimum down payment of 3.5% with a credit score of 580 [9][10] - **VA Loans**: Available for military service members and veterans, typically requiring no down payment and a minimum credit score of 620 [12] - **USDA Loans**: For low-income borrowers in rural areas, requiring no down payment and a minimum credit score of 640 [13][14] - **Fixed-Rate Mortgages**: Offer a consistent interest rate throughout the loan term, with options for 15 or 30 years [15][16] - **Adjustable-Rate Mortgages (ARMs)**: Feature a fixed interest rate for an initial period, after which the rate adjusts periodically [17] - **Second Mortgages**: Include home equity loans and HELOCs, allowing homeowners to borrow against their equity [18][20][22] - **Assumable Mortgages**: Allow buyers to take over a seller's existing mortgage, potentially securing better terms [24][25][26] - **Reverse Mortgages**: Designed for seniors, allowing them to receive payments from their home equity [27][28][29] - **Non-Qualified Mortgages**: Offer more flexible qualifying criteria, suitable for freelancers or those with non-traditional income [30][31][32] - **ITIN Loans**: Available for individuals using an Individual Tax Identification Number instead of a Social Security number [34] - **Construction Loans**: Used to finance the building of a home, transitioning to a traditional mortgage once construction is complete [35][36] - **Home Renovation Loans**: Financing options for home improvements, including FHA 203(k) loans [37][38] - **Chattel Loans**: For purchasing movable property, not including land [39][40] - **Bridge Loans**: Short-term loans to cover the gap between selling one home and buying another [41][42][43] - **Piggyback Loans**: A second mortgage to help with down payments, often structured as 80-10-10 [44] - **Balloon Mortgages**: Feature low initial payments with a large final payment due at the end of the term [45][46] - **Physician Mortgage Loans**: Tailored for medical professionals, often with relaxed qualifying criteria [47][48] - **Investment Property Loans**: Designed for properties intended for rental or flipping, requiring higher down payments [49][50] - **Interest-Only Mortgages**: Allow borrowers to pay only interest for a period, leading to higher payments later [51][52] Choosing a Mortgage Loan - Selecting the right mortgage type depends on individual financial goals, credit scores, and budget [53] - Refinancing options are available to switch to a different mortgage type later [54][55] - Common questions include the most common loan types, risks associated with certain loans, and the easiest loans to qualify for [56][57][60]

Core Insights - Credit scores are essential for mortgage qualification, with a range from 300 to 850, where a score of 760 or higher secures the best mortgage rates [1][9][18] - Different types of mortgage loans have varying minimum credit score requirements, impacting the borrowing options available to consumers [2][3][4][5][6] Mortgage Loan Types - **Conventional Loans**: Require a minimum credit score of 620, with a 3% down payment option for first-time buyers [2] - **Jumbo Loans**: Typically for homes over $806,500, requiring a credit score in the 700s [3] - **FHA Loans**: Allow scores as low as 500 with a 10% down payment, or 580 with a 3.5% down payment, but higher interest rates are likely for lower scores [4] - **VA Loans**: Backed by the Department of Veterans Affairs, generally requiring a credit score of 620 or higher, though no minimum is mandated [5] - **USDA Loans**: For rural properties, typically requiring a credit score of 580 or higher [6] Credit Score Calculation Factors - **Payment History**: Accounts for 35% of the score, emphasizing the importance of timely payments [8][12] - **Amounts Owed**: Represents 30% of the score, focusing on credit utilization [8] - **Length of Credit History**: Contributes 15%, with longer histories being favorable [12] - **New Credit**: Accounts for 10%, where too many new accounts can negatively impact the score [12] - **Credit Mix**: Also 10%, involving various types of credit [12] Importance of Credit Scores - A strong credit score indicates lower default risk to lenders, leading to better mortgage rates [9][10] - Lower credit scores may result in higher interest rates, even if the borrower can afford payments [10] Additional Considerations for Lenders - Lenders also evaluate debt-to-income ratio, down payment size, cash reserves, and employment stability when assessing mortgage applications [13] - A DTI ratio below 40% is preferred, with mid-30% being ideal [13] Strategies for Improving Credit Scores - Reducing debt, making timely payments, and correcting errors on credit reports are key strategies for improving credit scores [17] - The housing finance industry is shifting towards adopting VantageScore 4.0, which may broaden access for those with limited credit histories [17]

Core Insights - Conventional loans are the predominant choice for borrowers, accounting for over 77% of all mortgages originated in 2023 [1] - These loans are not insured by the government and have specific requirements that can vary by lender [2][3] Group 1: Types of Conventional Loans - Conventional loans can be categorized into conforming and non-conforming loans, with conforming loans adhering to standards set by Fannie Mae and Freddie Mac [2][3] - Conforming loan limits for 2025 are set at $806,500 for single-family homes in most counties, increasing to $832,750 in 2026 [8] - Jumbo loans exceed conforming limits and typically require higher credit scores and down payments [11] Group 2: Loan Features and Requirements - Conventional loans offer flexibility with down payments as low as 3%, but private mortgage insurance (PMI) is required if the down payment is below 20% [9][26] - Borrowers typically need a credit score of 620 or higher and a debt-to-income ratio of 50% or less, with many lenders preferring a DTI of 41% or less [26][33] - Fixed-rate and adjustable-rate mortgages are available, with fixed-rate mortgages providing consistent payments throughout the loan term [12][13] Group 3: Comparison with Other Loan Types - Conventional loans are contrasted with government-backed loans like FHA, VA, and USDA loans, which cater to borrowers with lower credit scores or limited savings [5][19] - FHA loans require a minimum credit score of 500 with a 10% down payment, while VA loans require no down payment for eligible military personnel [19][21][22] - Conventional loans may have higher credit score requirements compared to FHA or USDA loans, making them potentially harder to qualify for [26][30]