In the mortgage industry, BFS refers to clients who are business-for-self—individuals who are self-employed or own their own businesses.
BFS borrowers often face unique challenges when applying for a mortgage, as traditional lenders typically rely on stable, salaried income to assess loan eligibility. BFS borrowers may have irregular income or employ tax strategies that reduce their reported income, making it harder to meet standard qualifying criteria.
To accommodate BFS clients, lenders may consider alternative documentation methods, such as bank statements, proof of business ownership, or using a gross-up of reported income.
Some lenders also offer specialized BFS mortgage products with more flexible qualification criteria tailored to the needs of self-employed individuals. These options often help self-employed borrowers access financing without the same documentation as salaried clients, though they may come with rate premiums or stricter terms to offset perceived risk.
Last modified: November 5, 2024