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View Poll Results: Will I get it?
Yes 1 25.00%
No 3 75.00%
Voters: 4. You may not vote on this poll

 
 
Old 03-21-2013, 07:44 AM
 
3 posts, read 13,257 times
Reputation: 10

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Hi,

I have a negative taxable income, only because of a net operating loss (NOL) carryforward from a business that no longer operates. I have a very good job now for 3 months, and also did 2 years ago, but there was a period of unemployment of almost the entirety of last year (self-employed, but mostly living on unemployment/severance).
I have a very good credit score and will put 20% down from a gift. 5% will be from my own money.
I have an agreement to purchase a condo where the DTI will be 33%. I also own a home in another state which is rented and profitable, with a HELOC attached that has a balance of about 40% the value of the house.

What are my realistic chances? I have to decide now whether it is worth paying for the appraisal.

I was pre-approved by a national no-fee lender without seeing my documents, then denied as soon as they got the documents because of the unemployed period plus the negative taxable income.

Now I am with a local lender, high origination and "administration" fee, who has seen the documents and assures me they can get it done, but of course that is no guarantee.

Any advice/similar experiences?
I really want to know something realistic here and not stay in limbo on this, wasting everyone's time.

Thanks, I really appreciate any comments at all.
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Old 03-21-2013, 08:18 PM
 
98 posts, read 687,270 times
Reputation: 120
I think someone will probably be able to get it done but it will be a long process requiring a ton of documentation. I don't know if this is true but my real estate agent was saying in her experience it is actually easier for a person barely scraping up the down payment, doing and FHA loan and with 600s credit scores to get a mortgage than a person with good credit and multiple assetts.

I think you will probably have a better experience and chance of getting it done with a local lender than one of the national chains.

I am not in the mortgage industry but we are on our 5th house so have some understanding of the process.
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Old 03-21-2013, 08:34 PM
 
Location: MID ATLANTIC
8,421 posts, read 21,674,940 times
Reputation: 9935
When will the losses stop appearing? Is this a loss you are taking over 15 years? How long? Are these losses on an 1120, 1065 or on your schedule C.
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Old 03-22-2013, 01:30 AM
 
3,805 posts, read 8,866,325 times
Reputation: 4976
They will want documentation that proves that the self-employment business is dead, and no losses will be incurred this year - if there will be any, they better be slim.

Hopefully the new job is W2d, full time, and is salary, or full time hourly with a guaranteed 40 hour work week, because you won't be able to use bonus, commission, part-time, or overtime pay yet.

By the way, this sentence typifies a lot of the distress that I see on this board: I was pre-approved by a national no-fee lender without seeing my documents, then denied as soon as they got the documents because of the unemployed period plus the negative taxable income.
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Old 03-22-2013, 07:58 AM
 
3 posts, read 13,257 times
Reputation: 10
Thanks for the replies everyone.

The business ended in 2011 and losses were very small for that year.
2012 taxes not filed yet though, and probably won't be in time for closing, I'm not sure how to prove that the business ended then, but the losses/activity shrank to almost nothing 2011.

The losses were all on Schedule C previous to 2010 though, they are only being carried forward as NOL now, and will continue to be for maybe 5 more years.

New job is W-2 and full-time and so was the job in 2010-11, previous was salaried, new one is hourly with guaranteed 40 hour week, both with major corporations.

I guess I can understand that the FHA loan is easier because you are paying the PMI, which is what I really want to avoid because it kind of makes the rent vs. buy equation fall back towards renting, especially now that you have to keep it for the life of the loan I think?

Thanks again
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Old 03-22-2013, 08:50 AM
 
5,075 posts, read 10,298,557 times
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Sounds similar to what I had, except no NOL and the DTI was quite a bit lower. Underwriting was still a PITA but we closed in a month.
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Old 03-22-2013, 09:09 AM
 
3 posts, read 13,257 times
Reputation: 10
The mortgage broker is acting like it will be no problem at all. She even does not want to put in the documentation of the rental property being profitable because "it's just lot of extra paperwork that you don't need to qualify." Does this make sense or is she being lazy and will cause a problem in the end? It still shows as a liability but the income part that makes it profitable won't be documented..
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Old 03-27-2014, 05:55 PM
 
1 posts, read 3,923 times
Reputation: 11
Default Did you get the loan

Quote:
Originally Posted by Minnesoter View Post
The mortgage broker is acting like it will be no problem at all. She even does not want to put in the documentation of the rental property being profitable because "it's just lot of extra paperwork that you don't need to qualify." Does this make sense or is she being lazy and will cause a problem in the end? It still shows as a liability but the income part that makes it profitable won't be documented..
Hi did you get the loan and did they ask for more documentation?

I am in a simular position negative income due to NOL great credit 800+ with great income.

Thanks of you can reply,

Brian
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