What is the requirement for self-employed members regarding documentation?

Self-employed members have specific requirements for documentation to verify their income. The correct choice states that they must provide 12 months of bank statements, particularly if they are 1099 or corporate. This requirement is crucial because it helps assess the consistency and stability of the income over a substantial period.

Bank statements give a clear view of the income flow and expenses involved in self-employment. For individuals who receive income through 1099 forms, as independent contractors or freelancers, this documentation is especially pertinent as it highlights their cash flow and any potential fluctuations in income.

Furthermore, providing 12 months allows lenders to see if there is a reliable pattern of earnings rather than just relying on short-term income documentation, which may not present an accurate picture of the economic status of the self-employed individual. This detailed financial insight is essential for lenders to determine the creditworthiness of self-employed borrowers.