Homeowners can permanently cut one of their biggest monthly expenses by refinancing at today’s historically low rates. But there’s a new refinancing challenge for freelancers: You’ve got to prove that your income hasn’t been savaged by the pandemic.
Lenders are turning away freelancers and small-business owners who have lost clients or projects during the last four economically challenging months, mortgage experts say. The new rules haven’t made refinancing impossible for freelancers, but they have made it dramatically more difficult.
“Lenders used to simply require a current-year tax return to verify self-employment income,” said Steven Foster, owner of Pasadena mortgage brokerage Vista Financial Advisors. “Now you need to show bank statements for the past two months to prove that your income hasn’t been hurt.”