Shopping for the Right Loan

Shopping for the Right Loan, Not Just Any Loan

This week, I'm working with a self-employed business owner who is purchasing a home. Like many entrepreneurs, they maximize tax deductions, which often means their tax returns don't accurately reflect their true earning power. Instead of relying on tax returns, we used bank statements to document consistent cash flow and qualify them for financing.

Many self-employed borrowers also face credit challenges. Personal credit is often tied to business operations through loan guarantees, business credit cards, or fluctuating cash flow. In this client's case, the income wasn't the issue—their credit score was. While they qualified for financing, the available loan options required a significantly larger down payment than they had planned.

Because I have access to more than 280 lenders through NEXA, we were able to explore a wide range of alternatives. One option was an "Earned Equity" program, where another company purchases the home and the buyer leases it while working to improve their credit. While that solution can make sense for some borrowers, it also comes with meaningful costs and tradeoffs.

Rather than recommending the first program they qualified for, we took a step back and evaluated every option. We discussed using gift funds from a family member, liquidating a small business asset to increase the down payment, and creating a plan to improve their credit score over the next few months.

In the end, we chose the path that put the client in the strongest long-term financial position—not simply the one that got them into a home the fastest.

That's the value of working with an independent mortgage broker. My job isn't just to find a loan—it's to evaluate the entire marketplace, explain the tradeoffs, and help clients make the decision that's right for their financial future.