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Self employed for less than 2 yrs and have a credit score around 770 can I get approved.

New Visitor

Self employed for less than 2 yrs and have a credit score around 770 can I get approved.

I have been self employed for a little over a year and have a income of around 50k a year. My credit score is around 770 and I have enough for 10% down. I have talked to a couple of people and they are telling me without 2 years of tax records I will not be able to get approved without having a ridiculous rate or 20% down. Does this sound right? Can I purchase now or will I have to wait another year?
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3 REPLIES
Super Contributor

Re: Self employed for less than 2 yrs and have a credit score around 770 can I get approved.

There are programs that can accept self-employment less than 2 years, if it's acceptable or not is determined by automated underwriting... 770 score & 10% down should improve those chances quite a bit.  Documentation of income or assets isn't required either.
Mortgages (FHA, VA, USDA, Fannie, Freddie, Non-Prime) since 2002, based in Irvine, CA and lending in all 50 states

Information that is needed to determine if you qualify for a mortgage

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Member

Re: Self employed for less than 2 yrs and have a credit score around 800can I get approved.

HELLO SHANE THE MORTGAGE MAN YOU HAVE SAD THAT THERE IS A PROGRAMS THAT WILL ACCEPT SELF EMPLOYED WITH LESS THAN HOW CAN I FIND THIS PROGRAM.
 
 
THANK YOU
SEE
Message 3 of 4
Super Contributor

Re: Self employed for less than 2 yrs and have a credit score around 800can I get approved.

Here is FHA guidelines.
 

2-9 SELF-EMPLOYED BORROWERS

A borrower with a 25 percent or

greater ownership interest in a business is considered self-employed for FHA

mortgage loan underwriting purposes.

The following conditions apply to underwriting self-employed borrowers:

A. Minimum Length of Self-Employment. Income from self-employment is

considered stable and effective if the borrower has been self-employed for two or

more years. The high probability of failure during the first few years of a business

makes the following requirements necessary for individuals who have been selfemployed

less than two years:

1. Between One and Two Years. An individual self-employed between one and

two years must have at least two years of documented previous successful

employment (or a combination of one year of employment and formal education or

training) in the line of work in which the borrower is self-employed or in a related

occupation to be eligible.

2. Less than One Year. The income from a borrower self-employed less than

one year may not be considered effective income.

B. Documentation Requirements. The following documents are required from

self-employed borrowers:

October 2003 II-43

1. Signed and dated individual tax returns, plus all applicable schedules, for the

most recent two years.

2. Signed copies of federal business income tax returns for the last two years,

with all applicable schedules, if the business is a corporation, an "S" corporation, or a

partnership.

3. A year-to-date profit-and-loss (P&L) statement and balance sheet.

4. A business credit report on corporations and "S" corporations.

Retired Lender
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