Newly Self Employed and Seeking a Loan

David · Joined: 19 May 2004 Posts: 754 Location: Atlanta, GA

I started my own business in 2004, and my income has grown dramatically, but I wasn't sure how i would go about proving it. What is a loan officer going to need in order for me to qualify me for the new (higher) level of income I now enjoy?

BECCA9892003 · Joined: 20 Jan 2005 Posts: 400 Location: Altoona, PA

2 years of being self-employed..not really a way around it becasue to go self employed the lenders require 2 years full tax returns and a year to date profit and loss....

nikko3 · Joined: 20 Jan 2005 Posts: 246 Location: acton, ca

Dave what line of work were you in prior to your increase in income. If it was the same line of work, even though you were not self employed there are some lenders who will work with that.

David · Joined: 19 May 2004 Posts: 754 Location: Atlanta, GA

I went from drawing a paycheck as a customer service rep, to building websites. I am making something like 6x my previous salary and growing. I'll have my first tax return this Spring, but it will show that I did not maked much money, because the first have of last year I was living rent free as I started a business. I would assume that if I could put like 15-20% down that would help a lot. True?

BECCA9892003 · Joined: 20 Jan 2005 Posts: 400 Location: Altoona, PA

in some cases yes true but will also depend on your dti and some other factors..but i would be interested to know of lenders lending to anyone self employed for less then 2 years unless you went true no doc in which case rate is usually high...no mrs david???...she could be used on the loan

David · Joined: 19 May 2004 Posts: 754 Location: Atlanta, GA

Yes, my wife and I both work from home, and then go out dancing when we feel like it. It is a tough life. I guess there is nothing wrong with apartment life with everything taken care of by the leasing office, but it would be nice to put my money to better use. Maybe I could invest in some land for a couple of years. And I guess I can always wait 1 year.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Find a nice house, do a contract for deed, and refi in a year using the full appraised value.

If you're not sure about that, I'll talk more about it ;)

David · Joined: 19 May 2004 Posts: 754 Location: Atlanta, GA

Haplo wrote: Find a nice house, do a contract for deed, and refi in a year using the full appraised value.

If you're not sure about that, I'll talk more about it ;)

Around June I will definitely be thinking about this option, though I don't know much about what you are saying. I think you mean take the not so good loan this year, and then get a better one next year, right?

Gray Goose · Joined: 25 Jan 2005 Posts: 32 Location: Edmond, OK

David:

If you want to buy now ask for a No Doc program. No income, no assets, and no employment are listed or talked about.

With a credit score of of 640, you can get a 95% loan.

For a fixed rate 30 year, your rate will fall between 6.75% and 7.25%, depending on credit strengths/weaknesses.

An 80% loan is yours for about 6.125%

David · Joined: 19 May 2004 Posts: 754 Location: Atlanta, GA

Okay, so somewhere between 6.25% with large down payment and 7.25% with smaller amount. Now let's suppose I had perfect credit, and did not have this problem with the work history. What would be my percent approximately?

Gray Goose · Joined: 25 Jan 2005 Posts: 32 Location: Edmond, OK

Perfect Credit, Full Doc gets you:

100% fixed 30 year loan at 5.75% zero origination fee, zero discount points.

95% loan at 5.50% zero origination fee, zero discount points.

TheMortgageLady · Joined: 09 Feb 2005 Posts: 2

Hi David,

I am new to the forum and saw this post. I just wanted to throw in my $.02.

If you have 6 mos of self employment, no CPA letter, no business license, you can do 100% financing on a Stated Income loan. Rates are better if you verify assets (4 mos PITI), but stated assets is also an option.
Rate would be 5.875% on a fixed 30 yr. 7/1 Interest Only ARM rate is 5.625%.

Also, there are No Doc programs that go to 95% with a 620+ score. Rate will be higher on those of course.

Just wanted you to point out a few more options.

Take care,
Jeanie

David · Joined: 19 May 2004 Posts: 754 Location: Atlanta, GA

Thanks MortgageLady!
My wife has already picked at least 10 houses we are going to be moving into by September. :lol:
A little closer to the time I am going to try to get some help from people here. What is PITI?

TheMortgageLady · Joined: 09 Feb 2005 Posts: 2

Hi David,

PITI is (P)rincipal, (I)nterest, (T)axes and (I)nsurance...or basically your monthly house payment.

Good for her! It's always best to let the ladies do the shopping!

Take care,
Jeanie

AMP LOAN · Joined: 10 Feb 2005 Posts: 21

Call BC Bob @ New Century (or at least have your Loan Officer make the call). He can do it!
925-980-9259 Tell him Tony sent ya. With your credit you can get 100% all day long but if you want a better rate and easier terms, put some money down around 10%. Many lenders will give you 90% first time buyer with no MI=mortgage insurance. If you are still having problems, email me and I will help you out.