10 Things You Need to Know About Self-Employed Borrowers
There are many things that loan originators and branches need to know about self-employed customers.
- Many lenders, even with most conventional pipelines, report up to 40% of their files having tax returns. True self-employed borrowers, borrowers with a side business, borrowers with rental properties…the number of self-employed clients add up.
- Our clients have heard horror stories. The war wounds from a decade ago are staying nice and fresh, courtesy of the media.
- Self-employed clients receive 40% fewer loan quotes than everyone else. In this crowded market, 40% less competition could be a good thing!
- Self-employed credit scores are often lower. Keeping a business afloat and inventory in stock often means higher credit utilization.
- Networking. Your doctor, dentist, realtor, kids’ dance teacher, restauranteur- they’re all likely self-employed and they see dozens, if not more, people every.single.day.
- Referrals. That big network your self-employed client has? That network is likely to hear about YOU both good and bad.
- Speed. Our self-employed clients expect answers at the same time as the rest of our pipelines. That is sometimes hard to do based on the complexity of their tax returns.
- Expectations. Our clients are responsible for thriving businesses and have expectations that our service will meet- or exceed- the standards they have in their own work.
- Down Payments. Self-employed clients make above-average down payments, resulting in lower loan-to-value ratios.
- Pricey. And, for once, that’s not a bad thing. Despite those big down payments, self-employed clients request loan amounts 12% higher than their salaried counterparts.
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