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Old 07-26-2017, 03:33 PM
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Controlled Chaos Controlled Chaos is offline Member
Join Date: Jun 2014
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Default Qualifying For A Home Loan While Self Employed

I am trying to buy the house I currently rent. It will most likely be a FHA loan.

For those that have had success-
What was the process like and did you have any problems? I have an accountant but want to think of all scenarios and possible problems. I am an LLC and then take a profit transfer from the business on top of that.

Thanks for sharing your stories and I appreciate suggestions!
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Old 07-26-2017, 03:46 PM
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Controlled Chaos Controlled Chaos is offline Member
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I meant to post this in off topic - sorry!
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Old 07-27-2017, 05:04 AM
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LVG LVG is offline Member
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Location: Virginia
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I did not see your post in the off topic section, but just wanted to say that I think it depends on your state laws. When we tried to apply for a home loan, I had just opened my daycare. They said I had to be in operation for 3 years before my income could be counted to show that it was a viable and consistent income, so we had to qualify just on my husbands income. I am in VA.
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Old 07-27-2017, 05:48 AM
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Annalee Annalee is offline Member
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When we built our house years ago, the banker told me "when a person was self-employed, they could make their income look how they wanted it to, therefore he had to use his gut to determine whether or not to give us the loan". He did give us the loan, but this was a small community bank. So many banks have went corporate now, that you almost have to have money to borrow money Since building out house, though, we have had loans for vehicles, boats, etc. Generally, we just show my tax return for proof of my employment. Good luck to you!
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Old 07-29-2017, 02:10 AM
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knoxmomof2 knoxmomof2 is offline
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My bank requires that the self employed be in business for so many years (it was 2 or 3). We just submitted our tax returns as proof of income. We bought our house 2 years ago.
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Old 07-29-2017, 11:35 AM
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Snowmom Snowmom is offline Member
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Location: USA
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Well, not gonna lie... it sucks.

You need 2 years of taxes to prove income.
If we didn't have my husband's W2 job, we wouldn't qualify for much. Even though I technically make more than him.
It's the write offs that kill you in self employment.
Usually, they can write back in the depreciation on your home to up your income more. But, my lender said that underwriting couldn't with me, because it wasn't on a specific form it needed to be on.

I debated waiting a year and paying out the wazoo on taxes this year just to qualify for what we wanted next year.
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Old 08-02-2017, 05:51 AM
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lovemykidstoo lovemykidstoo is online now Member
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I got a home equity loan about a year ago. On my own income, not with my husbands because he has bad credit. So, I submitted our tax returns, but only used my income. I think I grossed just about $40,000 last year, but of course taxes didn't reflect that. I got a $50,000 equity loan. We do not have a mortgage on our house, just that. They figure self employed differently. They realize that people have alot of write offs so we don't get taxed to death.
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Old 08-02-2017, 07:23 AM
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Cat Herder Cat Herder is offline
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I was asked for copies of my most current 5 years statements of accounts, tax forms and a copy of my waiting list. (They seemed uninterested in my part-time check stubs ) I qualified for our home alone at under 4%, 15 years, then added DH several years later.
- Unless otherwise stated, all my posts are personal opinion and worth what you paid for them.
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home loan, self employed

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