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business owner needs mortgage

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New Contributor

business owner needs mortgage

maybe my post title is unclear but il specify...

 

i work with my family business.  ive always been an employee and im paid a weekly check.  we plan on restructuring the company and my brother and i will become part owners of the corporation. my father is the owner and my brother and i will split the rest.  50 percent to my father 25 percent to my brother and 25 percent to myself.

 

i explained all this to my mortgage broker who im friends with after he issued a pre approval letter months ago based soley on my credit, w2 and all other factors...he told me that if i were to go on the books as owning 25 percent of a company then i would need to wait an additional 2 years to apply for a mortgage.  reason being that if you are owning 25 percent you are considered self employed and the bank would want the tax records of my family business.  and if the company declared a loss then it would greatly effect my situation in terms of my borrowing power...

 

however, he stated that the number is pretty specific in terms of a percentage...if i were to go on the papers as only owning 23% of the company then i would not need to submit any additional corporate papers and i would be approved (or denied) based soley on my w2 and all other factors (credit, debt to income, down payment bla bla)

 

i am assuming there is truth to this? 

 

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Established Member

Re: business owner needs mortgage

Are you able to simply delay the restructuring? If you finance, then restructure in a year, you wouldnt be in a negative possition. I guess it all depends on when you are planning on getting your loan, and when the family is planning on mixing things up. Oh, and if your family can wait as well.


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Community Leader
Super Contributor

Re: business owner needs mortgage

They'd still want to see the corporate tax returns but then they'd see you are less than 25% owner and you would not be considered self-employed.

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