> ## Documentation Index
> Fetch the complete documentation index at: https://cameron.mintlify.site/llms.txt
> Use this file to discover all available pages before exploring further.

# Glossary

> Key terms and definitions for self-employed mortgage programs

## 1

**1099 Loan** — A specialty mortgage that uses 1099 forms rather than tax returns to document and calculate income, designed for independent contractors and commission-based workers.

**1099-NEC** — IRS form used to report nonemployee compensation of \$600 or more paid to independent contractors. The primary form used in 1099 loan programs.

## A

**Amortization** — The process of paying off a loan through regular payments over time, with each payment covering both principal and interest.

**Asset Depletion** — A qualification method that calculates income by dividing liquid assets over a set period, used for borrowers with substantial assets but limited documentable income.

## B

**Bank Statement Loan** — A mortgage that uses bank statement deposits rather than tax returns to verify and calculate income, designed primarily for self-employed borrowers.

## C

**Cash-Out Refinance** — A refinance that replaces your existing mortgage with a larger loan, allowing you to take the difference as cash.

**CPA Letter** — A letter from a certified public accountant verifying business ownership, self-employment status, and/or expense ratios.

## D

**Debt-to-Income Ratio (DTI)** — The percentage of your gross monthly income that goes toward monthly debt payments, including the proposed mortgage.

**Down Payment** — The portion of the purchase price paid upfront in cash, not financed by the mortgage.

## E

**Expense Factor** — The percentage deducted from business bank statement deposits to account for business operating costs when calculating qualifying income.

## F

**Full Documentation Loan** — A traditional mortgage requiring tax returns, W-2s, and pay stubs to verify income, as opposed to bank statement or other alternative documentation.

## G

**Gross 1099 Income** — The total amount shown on 1099 forms before any business expense deductions. Some lenders use gross 1099 income rather than net taxable income for qualification.

## I

**Interest-Only Loan** — A loan where payments cover only interest for a set period, after which payments increase to include principal.

## J

**Jumbo Loan** — A mortgage exceeding the standard loan limit set by the FHFA, currently \$766,550 in most areas—above this threshold, government-backed programs like Fannie Mae and Freddie Mac won't finance the loan.

## L

**Loan-to-Value (LTV)** — The ratio of your loan amount to the property's value, expressed as a percentage. An 80% LTV means you're borrowing 80% and putting 20% down.

## N

**Non-QM Loan** — A mortgage that doesn't meet standard government-backed lending rules. These loans are designed for borrowers whose income is hard to document through tax returns—like self-employed individuals—and are offered by specialty lenders rather than through programs like FHA or conventional Fannie Mae/Freddie Mac financing.

**Non-Warrantable Condo** — A condominium that doesn't meet Fannie Mae or Freddie Mac guidelines due to factors like investor concentration, litigation, or insufficient reserves.

## O

**Occupancy Type** — How you intend to use the property: primary residence, second home, or investment property.

## P

**PITIA** — Principal, Interest, Taxes, Insurance, and Association dues—the components of a complete monthly housing payment.

**P\&L Loan** — A specialty mortgage that uses a CPA-prepared profit and loss statement as the primary income documentation, rather than tax returns or bank statements.

**Profit and Loss Statement (P\&L)** — A financial document summarizing business revenue and expenses over a specific period. Must be CPA-prepared to be used as primary income documentation in a P\&L loan program.

**PTIN (Preparer Tax Identification Number)** — An IRS-issued number for tax preparers. Lenders may require the CPA's PTIN to verify credentials when accepting P\&L statements.

## Q

**Qualifying Income** — The income amount a lender uses to calculate your debt-to-income ratio and determine how much you can borrow.

## R

**Rate Adjustment** — An increase or decrease to the base interest rate based on risk factors like credit score, LTV, property type, or loan amount.

**Reserves** — Liquid assets remaining after closing, measured in months of PITIA payments.

## S

**Self-Employed** — Working for yourself rather than an employer, including sole proprietors, LLC members, S-corp shareholders, and independent contractors.

**Super Jumbo Loan** — A mortgage significantly exceeding standard jumbo thresholds, typically over \$2-3 million.

## W

**Warrantable Condo** — A condominium that meets Fannie Mae and Freddie Mac guidelines, making it eligible for conventional financing.