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Self-employed, paying self through payroll/W2. Can I get approved? (underwriter question)

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medialimit
New Member

Self-employed, paying self through payroll/W2. Can I get approved? (underwriter question)

How to setup my income to pass an “underwriters” test and obtain a mortgage?

 

What I have....
--765 credit score
--10% down payment (but not a dollar more)
--6 months bank statements (but not 12)
--6 months pay stubs (but not 12)
--2 years W2’s (but not 3+)
--2 years tax returns (but not 3+)

 

The situation...
--I’m self-employed setup as a sole proprietor BUT I pay myself weekly using a payroll service and direct deposit
--I won’t get approved for a mortgage as “self-employed” because I have no assets and sporadic/irregular bank deposits
--I do however make enough deposits to cover my weekly salary that I pay myself through a payroll service (direct deposited)

 

The question...
--Can I apply as a “W2” employee and NOT as self employed?
--Do underwriters check the company records of my listed “employer” (tax-id, established date, etc)
--I don’t want to break any laws, so I guess I should ask first if it’s “legal” to NOT list myself as “self-employed”


Other potential problems:
--Number of recent inquires (total of 8 in past 12 months)
--New credit recently opened (6 months old)
-------Car loan too new (only 6 months old and very little paid down from originating amount)
-------should I pay some of this down before october?
--Employment has only been “recently” reported to the credit bureaus (april 2013)
-------will it look suspicious to say i’ve worked there for several years??
--No rental history (wife has paid rent for past 3 years and she will not be a co-signer)
--No utility history (all utilities including phone, cable, insurance, etc is in wifes name)


FYI... My wife has a really bad credit score with deliqencies so I won't be having her "co-sign"


THANKS IN ADVANCE!!!!



Message 1 of 4
3 REPLIES 3
Billybob_TX
Frequent Contributor

Re: Self-employed, paying self through payroll/W2. Can I get approved? (underwriter question)

Won't the tax return show your business? If it doesn't you better get another CPA quick-like and amend some returns.

Message 2 of 4
Mike_B03
Valued Contributor

Re: Self-employed, paying self through payroll/W2. Can I get approved? (underwriter question)

You will have to apply as self employed. If you own more than 25% of a business, you have to report it. Is your home address the same as you business address? That's one easy way they will tell...but if not, they will want to talk to your "employer", which is you, so how would that work? Basically you have to report it.

 

It doesn't matter if you don't have assets or if your checks are sporadic, it just matter is you are making money. They will go by your 2011 and 2012 tax returns to figure out your income and will also need a P&L for this year.

Message 3 of 4
namvet
Established Contributor

Re: Self-employed, paying self through payroll/W2. Can I get approved? (underwriter question)

You are either self employed or you are not.  There are many ways for you mortgage lender to verify self employment. 

Message 4 of 4
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