Welcome!




Expand Your Education with These Courses from
Becoming a Successful Sales Professional: Skills for Sales Success: Part One.
Time Management: Skills for Sales Success: Part Two.
Business Creation - Prospecting: Skills for Sales Success: Part Three.
At Home with Diversity.
BPOs: The Agent's Role in the Valuation Process.

Real estate Q&A: How the Self-Employed Can Get a Mortgage

Have a comment on this article? Share on Facebook!

By Gary M. Singer

self_employeed_male(MCT)—Question: I am self-employed and make a good living. I want to buy a house, but it’s hard to document my income. So I’ve been getting turned down for a mortgage, even though I’m willing to make a large down payment. Any hope for me?  —Trevor

Answer: With banks and the federal government tightening lending requirements, it has become increasingly difficult for people who don’t get regular paychecks to qualify for loans. Although still rare, “stated income” loans are making a comeback. But they require very high credit scores, large down payments and deep cash reserves.

If this is not available, you will have to try to get a loan based on your tax returns. Still, this can be difficult because the self-employed tend to use expenses to offset their net income, resulting in low numbers. That forces them to choose between favorable tax treatment or getting a loan.

If you can’t find a loan from a traditional bank, there are a growing number of private lenders. Some, such as “hard money” lenders, will offer a smaller amount based only on the value of the house, perhaps lending 50 percent of its value. Others also will look at your credit, income and debts and lend larger amounts.

Because these kinds of loans are risky for the lender, be prepared to pay a higher interest rate and higher closing costs. Shopping around is especially important with these loans because the costs and rates vary greatly from one lender to another.

Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar.

©2013 Sun Sentinel (Fort Lauderdale, Fla.)
Distributed by MCT Information Services

Want instant access to great articles like this for your blog or newsletter? Check out our 30-day FREE trial of REsource Licensed Real Estate Content Solutions. Need easy stay-in-touch e-Marketing solutions too? Try Pop-a-Note for 99 cents!
Join RISMedia on Twitter and Facebook to connect with us and share your thoughts on this and other topics.




Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Copyright© 2014 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com

Our Latest News >>