The way people work is changing. More than ever, we're living in a "gig economy" - where people are working multiple jobs, starting small businesses, supplementing traditional employment with freelance work, or making a living through a range of non-w2 means (like Uber, eBay flipping, and so on). Unfortunately for many of the people in such scenarios, the common models (and many of the regulations) for securing mortgages simply didn't work!
Because non-traditional and self-employment don't have the same level of documentation and easily interpreted consistency of more common, w2 work, many lenders saw such people as too risky. Or, when such borrowers were able to secure loans, the terms were less than favorable.
The good news is that a new bill, currently pending in congress, could make things a whole lot easier for self-employed home buyers!
The "Self-Employed Mortgage Access Act" is designed to do exactly what the title describes: provide more efficient and agile access to mortgages for self-employed individuals. The bill will expand the federal QM regulations to include more acceptable income sources (which are currently pretty narrow, and cater larger to the traditionally employed), allowing those without w2 or pay stub documentation.
This piece of legislature would allow a growing portion of the population to enjoy the benefits of a Qualified Mortgages. Roughly 30% of the workforce, more than 40 million Americans, are now somehow involved in the "gig economy," and this represents a drastically underserved section of would-be homebuyers! The current rules simply do no reflect the state of the American workforce, and the Self-Employed Mortgage Access Act aims to turn things in a more realistic, modern direction. This is wonderful news for people who have been previously unable to secure a mortgage, or couldn't find one with favorable, affordable terms.
While the bill has yet to pass, it's chances of going through are high. Many people across the country would benefit, as would the lenders and brokers with access to a broader pool of borrowers. We can't predict exactly when the Self-Employed Mortgage Access Act will pass, but keep an eye on the news, get in touch with your preferred lenders to ask questions, and if you would be directly affected by this bill, don't hesitate to write your congressman or woman!
#mortgage #homeloan #qualifyingmortgage #selfemployed #selfemployedmortgage
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