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Old 01-07-2014, 07:59 PM
 
Location: Riverside, CA
2,404 posts, read 4,386,742 times
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I have just started my own business and I was wondering if it would be easier to qualify for a mortgage as a sole prop vs. an S. Corp as a new company? I would like to qualify for a mortgage as soon as I can. I currently own a home in Northern California and my new business is in Southern California. I don't want to sell my home in the current market until I can qualify to purchase a new home. I was hoping that I would be able to qualify for a mortgage in 6 months or so. Thanks for any feedback!
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Old 01-08-2014, 12:26 AM
 
Location: Southern California
4,453 posts, read 6,765,086 times
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Quote:
Originally Posted by Archan View Post
I have just started my own business and I was wondering if it would be easier to qualify for a mortgage as a sole prop vs. an S. Corp as a new company? I would like to qualify for a mortgage as soon as I can. I currently own a home in Northern California and my new business is in Southern California. I don't want to sell my home in the current market until I can qualify to purchase a new home. I was hoping that I would be able to qualify for a mortgage in 6 months or so. Thanks for any feedback!
To do the mainstream programs ,you'll need 2 years of tax returns for your business so show stable income. So 6 month is out of the question. It will be based on your schedule C , 1120, K1. You said you don't want to sell your house until can qualify for a new loan.

You can have the qualification based on selling your other home, but if you try to do this in a home purchase situation, it might be a put off to the seller since your loan and offer would be contingent on selling your home.

As far as the non mainstream programs, you are talking about much bigger reserves, possibly 18 months. Instead of a 4.5% loan it might be a bit higher. If you sell your home right before buying the next home ,you might not be able to use the proceeds as your reserves.
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Old 01-08-2014, 08:16 PM
 
Location: Riverside, CA
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Thanks for the info. Not what I was hoping for, but it does make sense.
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Old 01-09-2014, 06:25 AM
 
Location: Southern California
4,453 posts, read 6,765,086 times
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Quote:
Originally Posted by Archan View Post
Thanks for the info. Not what I was hoping for, but it does make sense.
Buy to answer your question , if you want to make the process easier, if you pay yourself and move the money from the business account to your personal account months before applying , you'll save yourself a lot of work, but you might have other tax implications.
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Old 01-10-2014, 05:02 AM
 
Location: MID ATLANTIC
8,643 posts, read 22,797,866 times
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If you have a 10% down and a super - strong non occupant coborrower, there are some (Freddie Mac) lenders out there that will use the FHA method of pooling income (and debts) to qualify you.
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Old 01-10-2014, 10:49 AM
 
Location: Southern California
4,453 posts, read 6,765,086 times
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Originally Posted by SmartMoney View Post
If you have a 10% down and a super - strong non occupant coborrower, there are some (Freddie Mac) lenders out there that will use the FHA method of pooling income (and debts) to qualify you.
They'll use just the no occ co borrowers income right, since there is lack of history in the OP's case? The non occ borrower gets to use a low down loan and the occupant borrower just gets to come along for the ride. Plus they want to move to Socal, talk about a super strong non occupant, it is like qualifying for a second home in socal just for the hell of it, plus if the OP doesn't sell their home yet, the non occ co borrower will have to have to qualify for 2 mortgages plus their own place.
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Old 01-11-2014, 11:13 PM
 
Location: MID ATLANTIC
8,643 posts, read 22,797,866 times
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No income would be credited for the occupant buyer, the non - occupant buyer's income would have to carry both buyers on paper, including the debt for both, including the other housing payment.
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Old 01-17-2014, 08:01 PM
 
Location: Riverside, CA
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I used to work for my main client as a sales rep. They are moving towards independent reps, which means that I will be doing the same exact job, but as my own company with my old employer as my main client. My move to another territory should mean double the income I used to make. My income should be around the 200K+ range. I work out of my home and do not need to carry inventory. I am a manufacturer's rep. My main expense is gas for my car and minor travel. Would any companies work with me in this scenario?
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Old 01-25-2014, 08:19 AM
 
Location: Southern California
4,453 posts, read 6,765,086 times
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Update - As things are always changing and not everyone does just fannie and freddie guidelines, It is possible to it with less than two years of tax returns for self-employed borrowers in California. Private money is betting on California.
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Old 01-29-2014, 09:49 AM
 
Location: Riverside, CA
2,404 posts, read 4,386,742 times
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Quote:
Originally Posted by thelopez2 View Post
Update - As things are always changing and not everyone does just fannie and freddie guidelines, It is possible to it with less than two years of tax returns for self-employed borrowers in California. Private money is betting on California.
Thanks for the update. Finally, it seems there may be light at the end of the tunnel. I am hoping that I don't have to wait for two years. This 500 mile commute and living out of hotels is getting tiring!
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