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Are there lenders that evaluate a self-employed persons income by client references?

I've been self-employed as a software developer for 13 years, I have great credit (800+ FICO) and there is high demand for my services but I"m having trouble getting a loan because I've taken time off over the past couple of years to work on apps and other projects, making my income low.  Are there any lenders out there that take references and client demand into consideration rather than just averaging the last two years tax returns?  
  • August 07 2012 - Seattle
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Answers (3)

You need to speak with a reputable broker who can look into this matter for you. The fact is, if you have no income for the last few years, it will be very difficult to get you a loan, even with client references, because that is no guarantee that you will be going back to work and have the capacity to repay the loan
  • February 07 2013
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Are you looking to purchase or refinance?

To get the low advertised rates you see in the market, all lenders are required to follow Fannie Mae and Freddie Mac guidelines.   They only allow Underwrites to use verified income - what you report on your tax returns.   (you may show great cash flow from your services, but that could all be wiped away on your tax return with expenses)

Local banks like Washington Federal and Sterling Bank has portfolio loans that give the flexibilty to do "common sense" lending.   These loan do carry a slightly higher rate because they cannot be packaged with the conventional Fannie/Freddie loans.

Rates are expected to stay low well into next year.  

If you want to get the best rate, do your taxes as early as possible next year.   Fannie Mae underwriting system 99% of the time only requires 1 year tax return - so ask your loan officer if their UW only needs the documentation required on the approval and if so you are golden.

  • August 08 2012
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Profile picture for nwhome.us
Yes, Washington Federal.
Contact me if you'd like a referral.
  • August 07 2012
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