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I am a current homeowner who underwent serious back surgery and is looking to move to a lower maintenance home with an HOA. The issue lies in getting a mortgage as in the past two years I became a partner in an LLC. While I have a credit score close to 800, funds to make the payments as well as savings to easily make a down payment of 20% or higher and still have at least 24 months reserve for monthly mortgage payments, my past years tax return is not stating enough income according to my broker because I am self employed. I was in the hospital and recovering for 6 months and did not take many owner draws.
I was told the only way I could get a mortgage is to have a co-signer (my mother) which wont work because of the debt she carries with her own home. One option im being told would be to have her purchase the home as an investment property and use me as a co-signer so that my name could be on the mortgage and not just the deed. She will be able to claim the 'income' from the investment which would satisfy the debt/income issue that we'd have with cosigning. I would pay the monthly mortgage payments and in a year or so when they like my tax return (as long as interest rates are ok), refinance her off the mortgage completely.
I understand the interest rate for an investment property is higher than an owner occupied property. Considering my current interest rate is high as i havent refinanced in 6 years, the investment interest rate would still be lower than what I am at now. After speaking to a realtor, my home value is not likely to increase and I will only be shoveling more money into it as it is an old home that does require a lot of maintenance. I will be spending more to hire people to maintain this property for me than it is worth, so id like to try to move as soon as possible.
I was wondering if anyone could see any other way to obtain a loan aside from having someone else purchase it as an investment property?
There are Declining Assets Mortgages. These are not "hard money" deals, they are simply Conventional loans. If you qualify, you get terms similar to a W2'd employee.
I am purchasing a home in Lehigh County, Pennsylvania.
I'm not familiar with declining assets mortgages? Perhaps I will have to do some research on this.
Different Lenders have different takes on this.
You're typically looking for a "Portfolio Lender," or a lender that retains and services their own loans.
DA loan types that I have seen (West Coast) involve calculating your total Liquid Assets (and non-penalty liquidate-able investment accounts) and using that amount to extrapolate your ability to make payments from those funds for ten (number varies) years at a specific Debt Ratio. Other ones allow for total assets. Alt-Doc (ie, Bank Statements, the one that makes the most sense) has not made the return that I had hoped for.
The exclusion of Self Employed Borrowers is, IMO, a gross over-correction made by elected officials who do not understand finance and merely want to be seen whipping a scapegoat.
Alt-Doc (ie, Bank Statements, the one that makes the most sense) has not made the return that I had hoped for.
I saw some Alt-Doc bank statement guidelines and they were ulgy.
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