Getting a Mortgage As a Self-employed Person

[Guest]

Hi All,

It was a cash out (if you can believe it) 277k loan in Southern California. Mid Fico was 742. You will have no problems getting a loan if you are SE if you can meet the following guidelines.

What was the LTV? I'm sure that helped close the loan as well?

 

[sluggo08]

We were approved for 80%. Borrower only needed 75%

 

[Sales71]

I have the same set up with my s Corp I pay myself shareholders equity and payroll.
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Couldn't be wronger, for more reasons than I have time to get into.
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Won't work anyway, he's still self-employed because he owns more than 25% of the entity.
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This is a distortion of the truth.

Its not quite that simple.

I think this guy is an IRS auditor. Mommyyy
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Johnny is an IRS auditor mommmyyyy

 

[xrac]

...........

2. Don't worry about setting up a LLC to pay yourself W-2, it doesn't make a bit of difference. As someone mentioned here, if you own 25% or more of the entity that pays you, then you are self employed. Even if you own less than 25% they are going to scruntinze the heck out of you........

Here is something about this that to me is just as squirrely as it comes. If I own more than 25% of a business I am scrutinized to the Inth degree. However, if I have a W-2 employee working for me for 2-3 years at the same entity that W -2 income is accepted as rock solid. It is sufficient and is not scrutinized. Now go figure. It is harded for me as self-employed than it is for the Joe who is working for me. That seems screwy to me.
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Hi All,

Thought I would chip in here, because I am currently employed as a mortgage banker. (I am a recovering former Allstate Agent...I am on step 5.) Just closed a loan last friday for a self employed person and had no problems. It was a cash out (if you can believe it) 277k loan in Southern California. Mid Fico was 742. You will have no problems getting a loan if you are SE if you can meet the following guidelines........

Sluggo, how long were you with Allstate, when did you leave, and why. I am just curious with all the debate on this forum about the Allstate "opportunity".

 

[jodieB]

Banks have been less willing to lend in this current economic downturn and I would assume in general is it hard for self employed people to gain a mortgage. You will need to show your return from the last couple of years, a credit and debtors list if you have one because it shows in real terms what you owe and owed. You credit scoring. I agree that you will need to talk to your broker because he will give you’re the best advice on your individual situation

 

[slushpuppyking]

2 years tax returns, show no business losses, and after an income calculation if all looks good you will be fine.

The real challenge comes when the business owner doesn't live in reality. He/She thinks they can explain every little thing on their tax returns or why income wasn't shown here but should have been, etc.

As a loan officer let me tell you business owners always want to act as if they are making more than they actually are. Really annoying.

 

[Jewelsy]

Looks to me like no doc loans or stated income loans for the self employed are making a come back. You usually just have to have minimum 680-720 credit score

 

[blue_wynd]

Yea? First time I heard of this. I know some peeps that would be interested.

 

[Josh]

Looks to me like no doc loans or stated income loans for the self employed are making a come back. You usually just have to have minimum 680-720 credit score

Could you elaborate?

I still have to show two years tax returns and I'm going with an indy broker with a bunch of lenders.

 

[Jewelsy]

Well, I wasn't able to get one because I had credit issues, But they weren't going to require 2 years taxes or any financial proof. There are a lot of companies that say they are doing stated income loans, no doc loans, but I just couldn't qualify at the time.