What is the typical requirement for income supporting documentation from self-employed borrowers?

The typical requirement for income supporting documentation from self-employed borrowers is to provide documentation for the previous 2 years. This timeframe is standard because it allows lenders to assess the borrower's income stability and trends over a reasonable period.

For self-employed individuals, lenders often seek documents such as personal and business tax returns, profit and loss statements, and sometimes bank statements to verify income and financial health. The two-year requirement helps to ensure that the income reported is consistent and reliable, which is particularly important given that self-employed income can fluctuate significantly compared to salaried positions.

The other options would not align with standard lending practices. A requirement for 5 or 8 years of documentation tends to be excessive, as the two-year period typically provides ample information for assessing income stability. Moreover, no documentation requirement would pose high risks for lenders, as it would make it challenging to evaluate the borrower's ability to repay the loan.