10 Things You Need to Know About Self-Employed Clients - By Rachael Harris

Rachael Harris

There are many things that loan originators and branches need to know about self-employed clients.

  1. 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.
  2. Our clients have heard horror stories. The war wounds from a decade ago are staying nice and fresh, courtesy of the media.
  3. Self-employed clients receive 40% fewer loan quotes than everyone else. In this crowded market, 40% less competition could be a good thing!
  4. Self-employed credit scores are often lower. Keeping a business afloat and inventory in stock often means higher credit utilization.
  5. 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.
  6. Referrals. That big network your self-employed client has? That network is likely to hear about YOU both good and bad.
  7. 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.
  8. 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.
  9. Down Payments. Self-employed clients make above-average down payments, resulting in lower loan-to-value ratios.
  10. 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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