Stated Income Loans - For Self Employed

This is definitely off topic and there is no specific area of the forum for this. Thought I would share with those who are also self employed.

The mortgage meltdown and subsequent housing crash back in 2008 really hurt the self employed people out there. We are taking advantage of the legal tax benefits by taking all of the legal tax deductions. However, when you go to qualify for a mortgage, you have to qualify using your NET income and not your gross like W2 salaried employees. This basically means you will qualify for a much smaller loan amount or no loan at all.

The regulation and guideline changes back in 2008 basically left many self employed people without the ability to get a new mortgage.

Well, I was able to find that these loan programs are slowly coming back. This resource for Stated Income Lenders connected me with a company that was finally able to help me to get a mortgage.

 

thanks for offering this up on the forum.

2008 raped me. we lost everything but our 2 old ass vehicles. we opened 2 new businesses exactly 5 weeks before the news started hitting the airwaves about the imminent crash in July '08 iirc. we have been bouncing back since, and it's been utterly life changing, pretty rough at times. and then in 2012 my luck turned really bad. life can be so unexpected. it's gone on for years and my business was not enough to dig out of this hole.

I'm set for now myself, I'm just appreciating your contribution. thanks for posting.

 

yeah and California was hit the hardest of all. The lending laws discriminate against self employed people.

 

full on truth. so so unfortunate. self employed people are, my opinion here, probably the biggest group of contributors to societal wellness. i would not put larger businesses in that kind of category, generally speaking.

 

Interesting... I am literally in the midst of finally licensing my business after being technically unemployed since graduating college 3-4 years ago... my hobby has become a big source of income and I actually have saved up more than enough to put a large down payment on a home, problem is I show no history of income so hoping to get approved for a loan asap after getting licensed. Im assuming it will be at least a two year wait in any scenario.

 

yeah you will need two years of being self employed and you will have to prove it. Then, you will have to qualify on your NET income with two years' worth of tax returns. Some lenders have loans where you qualify on bank deposits.

 

Do you work in the industry? Just asking out of curiosity as you seem well informed. I wish I knew more I should probably meet with someone soon to get a game plan going.

I read this article a few weeks ago its seems to suggest that you might only need one year stating:, "you may only need one year of income tax documents to prove your income, as long as your application qualifies for automated underwriting." referring to self employed borrowers.

Edit: forgot to lnk the article
https://themortgagereports.com/18303/mortgage-self-employed-1099-business-get-approved

 

I did a lot of research...

 

I had trouble as well... All of my business accounts were used against me... I have a $40k line of credit through a supply house. This is to buy equipment for the job, but it counted against me. I was using all my deductions and same issues. In the long run it made me way stronger. I bought a rental for cash, fixed it up and then used the equity in that to open up some cash flow. Since then I have payed all of everything off and I use my own cash to finance all my jobs. Work has been plentiful and if the job is too big then I pass on it. It really does make you a stronger businessman.

 

yeah you did it the right way. However, for many self employed people they dont have that option. So, it is good that there are now a few stated income loans out there for them.