topic Re: Self-Employed trying to get approved in Mortgage Loans

Self-Employed trying to get approved

antgavjoc — Sun, 17 Mar 2013 16:11:12 GMT

So I have been self employed for 3yrs now. I was operating out of a commericial building for about 2.5 of those years and as a result only netted 5k the first year and took a 10k loss the second. I am now operating out of my home which is payed off in full resulting in a huge income increase. My question is with the low income and loss of income on my W2's would anyone even consider lending to me? My current income averages $3500 per month. >5% utilization of CC. I have a car payment of $325.00 per month. And $15000.00 in Savings for a down payment. With the potential of $27000.00 in 6mo. Am I too much of a risk being self-employed. I have also been in the same Industry for 6yrs.

Re: Self-Employed trying to get approved

Anonymous — Sun, 17 Mar 2013 16:15:35 GMT

Unfortunately for the self-employed, they take your last two years of income and divide it by 24 to figure out your monthly income for qualifying.

How is your company set up? Incorporated? S Corp? LLC? It sounds like you get a W2 which is good but what about the rest of the business income?

Re: Self-Employed trying to get approved

antgavjoc — Sun, 17 Mar 2013 16:24:52 GMT

It is a LLC. Actually I do not get a W2. My accountand advised me not to pay myeslf a check because I would be Taxed twice. So my income is basically anything that is left after Gross less expenses.

Re: Self-Employed trying to get approved

Anonymous — Sun, 17 Mar 2013 16:36:09 GMT

I see...ok well then they will take your income over the past 2 years and divide by 24 based on your tax returns. You do get to add some items back in but that's the general gist of it. Do a search online for Form 1084A which is an income analysis for self employed that lenders use, it should be able to tell you what your qualifying income is.

Edit: Here is the form and instructions: https://www.google.com/url?sa=t&rct=j&q=form%201084a&source=web&cd=4&ved=0CEYQFjAD&url=http%3A%2F%2Fwww.bayeq.com%2FGetDocument.aspx%3FDOC_ID%3D83c2ba92-d564-4427-b64c-8bff71e07731&ei=FvBFUfebLaOe2wW4qYGgCQ&usg=AFQjCNGCBHMJ6qb8723wdBXVquOxQasdNw&sig2=rfCajUHb4tfGXU65ZbXTXA&bvm=bv.43828540,d.b2I

https://www.fanniemae.com/content/job_aid/instructions-1084.pdf