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Does being self employed holding us back from buying a home?

At first I thought that the only thing holding my husband and I back was our credit score, so we hired some credit repairmen and are on our way to having it ready by december. Talking with a loan officer that was recommended only made things worse. She said that even if I had an 800 I would not qualify for a home. Her reason for saying that was - that my husband was self employed for the past three years. He is now currently working a 9-5 making 30, 000 (8 months) and the business we own is finally picking up. She says since his business didnt make any money the past three years we would need to wait two more years before even trying because he doesn't have work history. We took a big hit with investing on a business but its finally.picking up. I make 50, 500 a year and have been at the same type.of job for 5 years. Will we not qualify in december because he doesn't have 3 years work experience or made enough being self employed?
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September 24 2013 - San Antonio
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Answers (11)

Being self employed doesn't not prevent you from buying.

The #1 reason self employed people get denied is income. It is decling or appears unstable.... or the write-offs on taxes reduce the income to a point that wouldn't sustain a loan.

His 8 month job is ok if he has previous experience in that field.

Give me a call if you would like to discuss further.
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September 26 2013
I suggest you speak with a different lender. All lenders are different so just because one denies you, it doesn't mean that all lenders will deny you. Although your employment situation is tough, there are still possible ways around it. You just have to find the right lender that is willing to work with what you have. So try out another lender and see what we can do for you.

Well I hope this helps! If you have any further questions or if you would like a loan, feel free to contact me!

Good Luck!
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September 25 2013
Here's the ugly fact...  If you are a smart business owner, you will write off everything under the sun to drive your tax debt down as far as you can.  This is what smart people do.

In the eyes of ANY traditional lender...  this means you don't make any money.   I know how you feel 100% because I make a pretty considerable income, but if you look at me on paper, you are about ready to send me some food stamps!  I write off everything I can...  so when you average my last 24 months, I'm not sure that I qualify for a stick of gum. 

There used to be "Stated Income" loans, and those have gone virtually extinct.   There are "Hard Money" lenders that will lend to you with a high interest rate and a high down payment. 

I did run into a great alternative...  and it has really worked well so far with almost all of my self employed clients. 

If you would like to buy a home but don't qualify for a traditional mortgage at this time and none of the homes on the market offered as Owner Finance really grab you...  We have an alternative!!  

 In a nutshell... 
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September 25 2013
You need to run! You need to speak to another LO. There are some good ones on this site. I have 24yrs in the business and can tell you, you can qualify you just with the right LO at the helm. Please click on my profile and I will be happy to help.

George Raymondo
Lone Star Lender
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September 25 2013
Depending on how much house you want to buy you could potentially just use the income you and your husband make at your "9-5" and disregard the self employment. We can use that to show work history, but the income or lack thereof could be a hindrance. There are ways around this if you would like to discuss further. I would need a more in depth understanding of your situation before stating what can and cannot be done. Call [phone removed by Zillow moderator]
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September 25 2013
Change loan officers at once.  Most experienced real estate brokers will tell you that they've done deals where one lender turned down a Buyer for a loan only to have another lender step up and get the deal done using the exact same paperwork.  

FHA loans are common but there are constant updates to the guidelines. This link shows you where lenders get the guidelines.  Notice that this year alone, 32 letters have been issued changing how loans are written or serviced.  

Don't throw in the towel just yet...and congrads for having a plan for your future.

Best,

Bob
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September 25 2013
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Yes both of us on loan and we are thinking of going with fha with 3.5 so thats what we are saving. We want a house in the 190 to 200s.
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September 25 2013
So you are both W2 employees making good income.  You have had a business that you both own it sounds like or your husband owns and he has it for three years.  As long as your self employed tax returns do not have substantial losses you should be good. 

Not sure if the loan officer you were working with is experienced enough to help you out with what you have going on. 

Are you both going on the loan and if so how much of a home are you looking to purchase?  What is the down payment that you are looking to bring in? 
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September 24 2013
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He did not have any losses just not enough profits. For example he made like 7,000 and claimed 3,000 in expenses. It's a new business so it usually takes 3-4 years. Ok feel better. We will be ready in December so until now we are saving.
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September 24 2013
If you have a job, I don't see the issue there. My only guess would be that your tax returns show huge losses. But, that can be worked around. If you would like, give me a call, I think we can make this work. 

I don't see work history as a problem. He has a job and so do you. Just leave the business out of the equation because it just does not a have a track record that we can use. 
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September 24 2013
That loan officer may be dead wrong. I've helped people fresh out of college with only 30 days of paycheck stubs buy a home so I question this "loan officer". Let me know if you want me to refer you to my preferred lender. Carlos Gonzalez [phone removed by Zillow moderator.]
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September 24 2013
 
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