Buying a house….getting a HARD time from the Mortgage Company…HELP!?

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Here is my situation : Im a First time home buyer. I am buying a foreclosure house for $ 130,000. I paid for my inception, I paid for the appraisal…and gave all my paper work to the mortgage company. I have EXCELLENT CREDIT. I am also putting down Over $ 60,000 ( Half of the sale price) on the home. Im doing a conventional loan. I have over $ 100,000 in my bank accounts. I have been SELF EMPLOYED since MAY 2010. ( I have not filed taxes on this yet BC the tax year has not come yet) I gave them my 2008 & 2009 tax returns as the requested. They said “I did not make enough money in 2008 & 2009” I then said….This is my CURRENT income now (Over $ 5000 a month now) I sent them my pay check stubs ( im an independent contractor now since May 2010). They are giving me a HARD time now saying “They thought i was salary” I said Um NO I told u i am self employed. So NOW They are requesting “SELF EMPLOYMENT TAX RETURNS” for 2009 because 2009 i filed as W2 since i was not a self employed Independent contractor. I told them I WAS NEVER SELF EMPLOYED UNTIL MAY 2010! Either way….I am putting over 50% of the Home price down ( i only need 60g loan). I have all my current paychecks available to show my earnings AND my BANK ACCOUNTS too! They said They will DENY me a loan if i cant show them SE tax returns for 2009. Again…i wasnt self employed in 2009. I am getting VERY frustrated. Does anyone know a way around this?

  1. Reply
    January 30, 2011 at 5:55 am

    When I went through the mortgage process, it was horrible! However, they did not scrutinize past two years of tax returns either. They seem to be more concerned with debts/income in the upcoming year (they project one year ahead). Of course they want you to show stability and a steady pay check. Since you can not provide proof of self-employment, and they want to see it now, you’re in a bind. I’d ask to speak to a manager or better yet go to another lender. Different banks have different rules.

    For example, I was denied with one bank at first and I went to a second bank and got approval contingent upon my paying this one bill. When I filed a complaint against the first bank and told them that another bank is willing to finance us, they immediately were very helpful. And you know what? They pre-approved us with less contingencies this why couldn’t they have done that before?

    In your situation, any bank would be so lucky to have you! You are a prime applicant! Try another bank..there’s too many out there for you to get aggravated over one! You can afford to pick and choose so don’t worry. 🙂

  2. Reply
    Simpson G
    January 30, 2011 at 6:05 am

    What it’s going to come down to is that you probably need to have had qualifying income for 2 years. Since you can’t provide proof of that (since it doesn’t exist), you will likely be turned down for the loan.

    Most lenders nowadays will NOT base a loan qualification on 5 months of work.

    You need to sit down with your personal lender and >calmly< and >clearly< discuss your options.

  3. Reply
    January 30, 2011 at 6:07 am

    I’ve worked for several different lenders, including banks, USAA, credit unions and mortgage companies over the last 20 years and each of them required 2 years of self employed income. If you just became self-employed in May, you probably won’t be able to get the loan. The same goes for part-time income. You have to have been doing that part time job, or been a landlord, for 2 years for us to count that income. If you get alimony or child support, there has to be 2 years history and at least 3 years to go for us to count it.

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