Self-Employment and Mortgages

[investinAK]

Do they mix?

What type of records should I keep throughout my investments to insure that I can get a mortgage on my own home?

My wife and I are moving to California early next year and we are planning to L/O our home so as to build credit and some equity, for 2-3+ years and then finance with a conventional mortage. How is this possible being self employed? I will be incorporating in the next few months, if that would make any difference? My only guess is to use your tax returns/tax i.d. number? Bank Statements?

I am truly lost at this point...

(I am assuming the same will apply with financing a vehicle?)

[loanconsultant]

In order to get a no doc loan you will still need 2 yrs tax returns,2 months bank statements.You will get a bit of a higher rate to get no doc however.
You should always keep atleast 3 yrs tax returns reguardless.

[loans2investors]

What you might want to consider if you want to go conventional loan which to me means Freddie or Fannie type of loan or mortgage with full documentation of your income.

If you are going to Incorporate then you must understand that if you own 28% or more in that company then the underwriter is going to ask for your corporate taxes as well as your personal taxes. So you will need to show enough personal income comming from that business for the past TWO years.

Now if you have a LLC or you file with a Schedual C the underwriter is looking at your personal income now all the scheduals that you file we are able to adjust your income which such items as depreciation,some write off and increase your income up.

You could also get a loan that is not conventional and has good rates as long as you have great credit you can do 12-24 months bank statements and use this as income. (this is a good alternative and is alot less hassel and paper work) Some lenders with cut your bankstatements down to 50% if this is a business account {the reason is they feel that you are going to use the other 50% for business expenses, payroll, ect.} If it is a personal account then they use 100% as income. Keep copies of your bank statements if you choose this program.

Another program is going STATED Now there are many varieties of this program from verifing your assets to not.

This is a very good program for those that just don't want the headache of all the paper work or they dont want to bother with anything.

You may also consider a NO DOC loans which you don't even have to have a job income or nothing just great credit. The only draw back is a lower LTV and usually slightly higher rates than a stated loan.

I hope that this helps if you have any more questions let me know 90 % of my clients are SELF EMPLOYED :SM029:

[investinAK]

WOW! thanks for all that great info! I really appreciate it, and if I have anymore questions I will be sure to shoot them your way!


Ryan

[Dan Auito]

Dynamite answers from a very experienced lender above folks. I'm not going to tell you anything other than this person really does know what they are doing. I'm going to make you investigate and find out for yourself. This person has my seal of approval so you can bank on not being steered wrong! Dan :icon_bete