Self Employed Mortgage

[Lucifer]

OK........  I am going to need some help on this one.  Son thank you in advance for anyone that can advise.

I am self employed.  I want to buy a 2 family home - live in one unit, rent out the other.

I would like apply and buy in about 6 months from right now.

The house:    Goal is a 300-350k two family.  Reasonable rent from the other side would be conservatively 1000/mo.   (1200 may be more reasonable but let's go worst case)

The borrower:   Self employed 10 years.   Listed on a home title 1.5 years ago.   F8 about 800.   No debt of any kind.  No crdit cards, no car loans, no back taxes, no alimony, no childsupport.  Nothing.    Self emplyed income steady from 70-90k except for 18 as I had a larger set of business expenses than usual (wrote off vehicle).    Typical self employed income situation......write off as mush as possible to get taxes down but it makes me look like I earn less than my w-2 counterparts.    This year will be back at the 90k range.   This year's taxes up to date.

I plan on filing early - again all taxes up to date.

What are my chances?  What kind of loan products are out there for someone like me?   How can I make myself more attractive to lenders between now and then.

Oh - used to be LLC filing taxes with llc being a disreguarded entity.  Have been just sole prop. for the last year and a half but ready to go back to LLC/disreguarded as before    (reason for the inconsistency was the divorce I went though)

Downpayment - looking to be about 5-10 percent but prefer to be closer to that 5% mark.

Do I have a chance in 2020 or should I be looking at 2021 or 2022?   

I'm in an apartment right now.   Have be be out by end of August or sign another 1 year lease.  

Sooo..I think that's about it.

Again, thank you for your time and input.

[Anonymous]

I am self-employed and my lender just wanted to see 2 months' of my most recent tax returns along with a recent profit & loss statement. They said they would "analyze" the return and determine if I had written off too much, etc. I think in some cases, the lender can "remove" some of the write-offs and put them back as income, but you'd need to talk to someone for specifics. 

If you have no credit cards, you may want to consider getting a few and just paying them off every month so you have some kind of credit history. They would need to see some sort of credit history to show you're responsible with credit. But an 800 score is stellar so you might be OK in regards to that!

I wish I had more to give you but there are lots of really helpful people here who can guide you through. Overall though for self-employed, as long as you show a profit they will usually take the average of the last two years and consider that number your income. I am registered as a sole prop. and had no issues. Good luck!

[homeloanexpert]

There are several options available to you. For CONV financing, we can get away with (1) year tax return and proof of self-employment for at least 5 years. The only issue is the taxes you provide will need to verified via 4506-T. Proof of self employment can be past business licenses, corp documents or CPA letter. If for some reason your income is still too low for the desired loan amount, you can always go NonQM Bank Statement Only. 

[Lucifer]

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@homeloanexpert wrote:

There are several options available to you. For CONV financing, we can get away with (1) year tax return and proof of self-employment for at least 5 years. The only issue is the taxes you provide will need to verified via 4506-T. Proof of self employment can be past business licenses, corp documents or CPA letter. If for some reason your income is still too low for the desired loan amount, you can always go NonQM Bank Statement Only. 

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That doesn't sound as hopeless I feel this could be or have heard about.     NonQM - I am thinking this is some sort of low doc loan with a higher rate - good to keep in the back pocket for sure.      I am self emplyed for 10 years and can show tax returns to prove it plus my LLC filings.

As for the credit card question - I have several.  Just no balances other than what I let post.   There is one running balance but its a l I could pay off at any time and I've just been throwing is a grand per month - by decemebr its gone.   I have excellent credit with a 15 year history.

I really like hearing conventional could be an option.    This is the last big milestone to putting the divorce behind me.

[JVille]

Remember any Spousal Support or Child Support will be included in your DTI ratios for qualifying.