Finance
A Colorado buyer who is self-employed applies for a mortgage. The lender typically requires the self-employed borrower to provide:
AA. Only a letter from the employer
BB. Two years of personal and business tax returns, a year-to-date profit and loss statement, and evidence that the business is ongoing✓ Correct
CC. Only their most recent bank statement
DD. Only a credit check, same as an employed borrower
Explanation
Self-employed borrowers face more documentation requirements because their income is less predictable. Most lenders require 2 years of personal and business tax returns to verify income history, a current year-to-date P&L statement, business licenses, and evidence that the business is operating.
Related Colorado Finance Questions
- Which federal program provides mortgage insurance for Colorado senior homeowners through an FHA-insured reverse mortgage?
- A Colorado property has an NOI of $48,000 and sells at a 6% capitalization rate. What is the indicated value?
- The Colorado Housing and Finance Authority (CHFA) primarily serves:
- A Colorado property owner with significant equity wants to access funds without selling their home. They could use a:
- A Colorado property owner wants to do a 'cash-out refinance.' This means they:
- A Colorado buyer asks what 'discount points' are. Each discount point equals:
- What is the debt-to-income (DTI) ratio that most conventional lenders prefer to not exceed for a borrower's total monthly debt?
- A Colorado mortgage servicer must notify a borrower within how many days if their loan is transferred to a new servicer?
Practice More Colorado Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Colorado Quiz →