Home Loan for Recently Self-Employed

[Rose Red]

Originally Posted by bls5555

And this is what they SHOULD ask for. Yes it is difficult for a self employed person to get a loan if what you were having to do before was LIE about things.

That is correct. That is what was asked back in the day befor stated income a.k.a. liar loans. When they first came out we used to joke and call them dope dealer loans because no income was documented. I digress..

Before stated income loans. Underwriters would alway ask for two year documentation for a self employed borrower. Two years tax returns and YTD profit and loss. The income needs to be averaged over two years. A business could have some great months and some not so great months. They need an average to qualify a person. A business may not survive the 1st year and a half.

[dfwsurveys]

Originally Posted by bls5555

Let's try not to be overly dramatic, can we? To the OP, this isn't true at all.

I agree with the original poster. I have been told the same thing by banks. The banks told me that I could have excellent credit and put down 80% and I still would be barred from a loan due to the "no exception" 2 consecutive rule......

[dfwsurveys]

I have been self employed most of my life and in the same field since 1992. In 2/2007, I took a "staff" position (in my same field) for one year and decided it was not for me, then "returned" to self employment, in that same field. BankS told me they wanted 2 years tax returns to prove my income. I provided 3 plus checkstubs from clients and A/R's. After completing all the paperwork, going in and sitting down, they came back and said there is a problem. While your credit is excellent and you have the money to put down, you have NOT been "self employed" for 2 consecutive years and can not therefore, qualify. Other bank told me the same thing. (I have bought and paid off several homes in my life in addition to vehicles. EVERYTHING I own is PAID FOR. They still refused. I have been "re-self employed" for 1.8 years now, just under 2.0 years.

What I seem to notice are banks favoring those who both work and want the same HIGH monthly payments (in a volatile economy) where "employees" are "at will" and are more prone to losing their jobs and defaulting on loans. I see more forecloses coming as a result. While the ostridges stick their heads in the sand and say "no way", is it possible that we (our economy) are/is being set up to fail "on purpose"? Self employed businesses make up 2/3 of our economy. Why are we being denied advancement and success then?

[dfwsurveys]

I have been self employed most of my life and in the same field since 1992. In 2/2007, I took a "staff" position (in my same field) for one year and decided it was not for me , then "returned" to self employment again, in that same field. Banks told me they wanted 2 years tax returns to prove my income. I provided 3, plus checkstubs from clients, and A/R's. After completing all the paperwork, going in and sitting down, they came back and said there is a problem. While your credit is excellent and you have the money to put down, you have NOT been "self employed" for 2 consecutive years and can not therefore, qualify. Other banks told me the same thing. (I have bought and paid off several homes in my life in addition to vehicles. EVERYTHING I own is PAID FOR. They still refused. I have been "re-self employed" for 1.8 years now, just under 2.0 years.

What I seem to notice are banks favoring those who both work and want the same HIGH monthly payments (in a volatile economy) where "employees" are "at will" and are more prone to losing their jobs and defaulting on loans. I see more forecloses coming as a result. While the ostridges stick their heads in the sand and say "no way", is it possible that we (the economy) are being set up to fail "on purpose"? Self employed businesses make up 2/3 of our economy. Why are we being denied advancement and success? Here's one for the record of intelligence...

I once was looking at a possible D/W on acreage. I was told that banks have decided that manufactured homes are a bad risk. Somewhat confused, I replied that I was not aware that manufactured homes were working and paying the notes. Stupid me always thought it was the homebuyer and not the home. Interestinly, they were at a loss for words and said they never thought about it that way before.

[photography123]

By having much debt in our self-employed s-corp business (10 yrs) going to afffect our chances of getting financing for a house we want to purchase? ..............thank you

[texdav]

They will alos want such a time worked for emplyeees now days;the days of easy credit are gone. The senate committee meeting yestewrday was discussing going to a 20% down payment like Canada has quailfy for any government guaranteed mortgage. They were also discussing the tax incentiuve for home owners elimination.Many changes coming as a result of government legacy cost from the housing bubble.

[Tallysmom]

Originally Posted by photography123

By having much debt in our self-employed s-corp business (10 yrs) going to afffect our chances of getting financing for a house we want to purchase? ..............thank you

Yes -- I would think it would. The people I know that do an S-corp are usually sole proprieters, and that means they are the company. So that debt is yours. And a large debt affects your credit.

[matcat]

I am a Realtor and I have not seen any self employeed purchaser get a loan in a long time. The absolutely are being discriminated against. If an employee goes to get a loan the bank STARTS with the GROSS income of the employee. If a self employed person goes to get a loan they START with what is left after all the deductions. Even though an employee is allowed to take deductions, the Self Employed doesn't get them added back in. There has to be a better way for the United States to support the small businesses and self employed.