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Old 11-09-2010, 01:46 PM
 
Location: Chicagoland
5,744 posts, read 9,814,899 times
Reputation: 6991

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I sold my primary residence last year and am thinking about buying another home (am currently renting). I also own multiple rental properties with positive cash flows. I am a business owner (5 y.o. company) and took a very small W2 salary last year. Instead, I reinvested into growing the business and hiring employees. I also used rental property equity to secure a commercial loan/business line of credit.

I doubt I will be able to qualify for a traditional mortgage based on my 2010 W2 and high leverage. I do have a good credit score and 15+ years of perfect loan/mortgage payments on all my properties. I may also be able to put together a higher down pmt. next year. I will not sell any of my rental properties though.

I can spend 2011 paying myself a good salary so that I qualify for a traditional loan in 2012. Or, perhaps there are other financing options out there for people like me so that I may buy a home in 2011? I am specifically interested in owner-financing or perhaps rent-to-own. However, I assume that, with these types of deals, the purchase price will be substantially inflated. I probably would have been a perfect candidate for a no-doc income loan if they were still around. Any professionals out there who can give me some tips?
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Old 11-13-2010, 12:46 PM
 
2,776 posts, read 3,425,528 times
Reputation: 2312
Quote:
Originally Posted by GoCUBS1 View Post
I sold my primary residence last year and am thinking about buying another home (am currently renting). I also own multiple rental properties with positive cash flows. I am a business owner (5 y.o. company) and took a very small W2 salary last year. Instead, I reinvested into growing the business and hiring employees. I also used rental property equity to secure a commercial loan/business line of credit.

I doubt I will be able to qualify for a traditional mortgage based on my 2010 W2 and high leverage. I do have a good credit score and 15+ years of perfect loan/mortgage payments on all my properties. I may also be able to put together a higher down pmt. next year. I will not sell any of my rental properties though.

I can spend 2011 paying myself a good salary so that I qualify for a traditional loan in 2012. Or, perhaps there are other financing options out there for people like me so that I may buy a home in 2011? I am specifically interested in owner-financing or perhaps rent-to-own. However, I assume that, with these types of deals, the purchase price will be substantially inflated. I probably would have been a perfect candidate for a no-doc income loan if they were still around. Any professionals out there who can give me some tips?

My loan is pending underwriting, so dunno if it worked or not, but I take a small salary from my s corp and a larger distribution, which counted as income for my tax returns.
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Old 03-28-2011, 09:21 AM
 
1 posts, read 3,023 times
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@GoCubs 1- I have had a sole proprietorship for 12 years. Have been in the loan process for 6 weeks now, borrowing a small amount of money. (150k) Stellar credit, 25 years as a home owner, do not own any other properties right now, debt is low. I cannot even begin to tell you how difficult this process has been for me, short of asking for DNA samples, they have asked for things I have never been asked for before. My 2010 return showed a mere 500 a month increase in income from the previous year, and they are convinced I am manipulating my expenses and income to get the loan. If your income has increased even the slightest bit, they are incredibly suspicious and figure you are manipulating. This whole process has been more like a tax audit, or a criminal investigation than a loan application. I am in the 12th hour now, supposed to close in 2 days, and still do not know if they will write the loan. I have performed in every way, provided every document that they have ever asked for, it's been frustrating to say the least. A small tip, if you are even considering buying, you really ought to start talking to a mortgage officer now, to see if you will even qualify. It's not "sign and drive" like it was a few years ago. Best of luck
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