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Self-employed refi? Low income but high credit score and good equity

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DieselAmy
Valued Member

Self-employed refi? Low income but high credit score and good equity

My partner has been self-employed for at least five years.  About three years ago, he bought a bank-owned home for about $60k using stated income to qualify.  His conventional 30-yr mortgage w/PMI is at 6.75%, so he would like to refinance to a better rate and no PMI.  I now live with him but we are not married so my income doesn't count; we're not at a point to put both our names on this mortgage together, but it sure would make this a lot easier!  (I don't want to co-sign either.)

 

Anyway, he has a solid 800 credit score, no debt other than mortgage and pays his credit cards in full every month (though they often carry several thousand dollar balances due to his business costs).  His tax returns show a very low income, though, as I know he qualifies for EITC (I think that's <$13k or so income) due to all the business writeoffs and the general low income from construction/remodeling work.  This year will be at least as bad or worse since business has been slow, but he doesn't have trouble paying the mortgage and of course has never been late, etc.

 

We think the house (which he has rehabbed) would appraise at $80k-90k, and the mortgage balance is $55-58k I think.  I am trying to determine if lenders will even look at him because of the low income, even though everything else is great.  Is it best to try through the same mortgage co. he already uses? 

 

He probably has $10k in savings and maybe a little more in mutual fund accounts.  We also have a joint account at my employer's credit union with $12k in it; will that count for him?  I can even double the amount in that account from other places if it will help, but I know they sometimes look at recent influxes of money suspiciously.  I am hoping with equity, cash on hand, and excellent credit he can requalify, but wondered if anyone knew the lending climate around that these days for low-income self-employed people.

 

I think trying through our credit union might also be a good choice; other good places to try?  The extra complication is that we plan to move to Ireland in the spring and it would be nice to get a refi done before then!   We'll only be gone a year but paying less on the mortgage would be nice.  We've been out of the house buying loop for a few years so I'm a little rusty.

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Anonymous
Not applicable

Re: Self-employed refi? Low income but high credit score and good equity

he needs enough income to qualify for the mortgage and he has to be able to prove it going back 2 years.

 

Stated income loans are basicly gone.  Pretty much all loans require full income verification.

Message 2 of 3
Anonymous
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Re: Self-employed refi? Low income but high credit score and good equity

I would recommend trying a local bank that would be keeping the loan in house.  That may be your best bet.
Message 3 of 3
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