So I am just getting run through the wringer with banks trying to get a home loan. We did a rent to own with my landlord and since I started inquiring about loans, every bank I deal with has a different qualification than the last. Now I'm not surprised by that, but it's like I can't catch a break.

What really burns me, is that me becoming self employed has for some reason sabotaged me. A few of the banks require 2 years of tax returns to show my income. Problem is, I've only been self employed for 8 months.

Funny thing is, nobody has yet to check my credit. Not that it's excellent, but I haven't made it past all these random qualifications to get to that point.

Not quite sure what to do.

You've been self employed for 8 months... has your income been steady and sufficient for each of those 8 months? From a Banking perspective, it doesn't sound all that safe to loan to you. You don't have a steady job. And yes, they will require 2 years of tax returns, typically 1-2 months of pay stubs, and about 6-12 months of bank statements.

I can recommend lenders to work with though, if you're interested. One that I got my mortgage through, the other I work for.

In reply to mtn:

Yes that would be helpful. My landlord is getting antsy to get this property off his hands (we've been renting for 3 years).

my email is syntheticblinkerfluid@gmail.com

That is one of the downfalls of being self-employed. Sorry you are struggling.

It doesn't help that after the housing market essentially burst, lenders are doing a lot more due diligence on the loans that they're buying into. I bought a house pre and post- collapse and ensuing legislation, and the difference in process was astounding. So much more documentation required, explanation letters, time, bank statements, statements surrounding bank statements, etc. And that was with me having 10+ years of steady employment history at the same company. I can't imagine what it's like being self-employed.

It sucks, but there's a reason for all the hassle. Banks are just a lot more selective with their money right now. It will ease up with time, but it might be a little tough to secure one without a little more employment history.

Try your local Credit Unions. We did our last two houses through two different credit unions and found them much easier to work with than the banks we used before.

Went through this with the ex-wife when we went to refinance the house from my name into both of our names. She was self-employed and had been with a steady income for 6+ years at that point.

Still needed 2 years of income taxes and IIRC something else as well.

In reply to t25torx:

The most current one it a Credit Union.

Credit union may be the best bet or a GOOD mortgage broker.

For us it's the opposite. We're approved way over our heads but we can't find a house in a modest price range.

In reply to pheller:

So, the Zillow thing didn't work?

Not sure if its available in your area but we got our home loan through an AG lender. They later sell it too a bank but it is fixed rate. Our loan actually ended up at a bank that originally wouldnt approve us because of my job change after a lay off.

You can thank your Super Majority for your woes. Anyone with any type of variable income now has issues and many cannot buy. Just do a search for the Dodd-Frank Act and you'll find that these new requirements are now LAWS not just rules and it will literally take an act of Congress to change them. It's one of the things in Trumps sights.

1 problem you are at a bank. Banks have the lowest approval rate and the highest costs of any mortgage lender.

Yes, the rule book says you have to be self employed for 2 years AND HAVE 2 YEARS TAX RETURNS. Did I mention that due to the Super Majority tax returns are now required to be pulled directly from IRS on every loan. No one bothered to ask the IRS what they thought about it and things can get backed up.

A mortgage lender is required to use your bottom line income number not your gross number so don't write anything off. There are a few things we can add back in, but much less than we could prior to 2010.

With that said there's a class of lender who doesn't have to be as strict as the others. We are a Top Tier Lender which means we are ranked in the top 10% nationwide in the all important HOW DO YOUR LOANS PERFORM category. If you can find one in your area then they can do your loan once you have one year's tax return, but they still have to use your reported income. It helps greatly if you have been employed in the same field as your company and you can show previous tax returns with significant income.

You've got mail from me.

MegaDork if you mean you've sent mail to me, I haven't received it. You can call me on my cell. four sex nine 371 zero 226

SVreX wrote: In reply to pheller: So, the Zillow thing didn't work?

Yet to be seen. We'll probably get the tour of the place next week and see if any competitors have popped up.

SyntheticBlinkerFluid your situation is now considered abnormal under the new laws, but don't give up all hope.

There are options out there it's just that an abnormal situation means you'll have to take an abnormal loan with abnormal rates & terms. They might not be bad terms, just different than the normal. Just try not to get any type of adjustable loan because as the economy improves rates will rise. The Feds raising their rates is small potatoes compared to the rate increases an improved economy will bring.

One of the first things on Trump's agenda is to dismantle, repeal or greatly change the Dodd-Frank Act which is the genesis of all your woes. IF he does as he says that means things will loosen up shortly afterward.

IF that happens you will see housing and a number of other areas improve dramatically and swiftly. It literally is the only thing holding housing back.

carguy123 wrote: MegaDork if you mean you've sent mail to me, I haven't received it. You can call me on my cell. four sex nine 371 zero 226

Nope, sent it to SBF.

mtn wrote: You've got mail from me.

Yes I've received it, I will be dealing with this after I get back from Oregon.

Did you try Churchill mortgage? It's the Dave Ramsey approved place to go. I used them for a refi and it was easy-peasy.

In reply to ddavidv:

You do realize that Dave Ramsey approved simply means the company was willing to spend the money to advertise don't you.

We are contacted all the time by his telemarketers.

Good grief! Without writing a book...

carguy123 wrote: a bunch of politically charged accusations without much basis in fact...

But Carguy is a mortgage broker... and, well remember the mortgage meltdown of ten years ago? (yeah, I went there)

Fannie sez: Fannie Mae generally requires lenders to obtain a two-year history of the borrower’s prior earnings as a means of demonstrating the likelihood that the income will continue to be received. However, a person who has a shorter history of self-employment — 12 to 24 months — may be considered, as long as the borrower’s most recent signed federal income tax returns reflect the receipt of such income as the same (or greater) level in a field that provides the same products or services as the current business or in an occupation in which he or she had similar responsibilities to those undertaken in connection with the current business. In such cases, the lender must give careful consideration to the nature of the borrower’s level of experience, and the amount of debt the business has acquired.

Linky

The Dodd-Frank Wall Street Reform Act is hardly a perfect piece of legislation but it does not require lenders to obtain tax transcripts. Neither does Fannie, by the way, but it is a prudent quality control measure against fraud. Dodd-Frank does require that lenders verify an "ability to repay". The investment community decides what is adequate assurance of ability to repay. A minimum of two year's self-employment history has been the standard for a long time.

I hope your business succeeds, but most fail within 2 years. That's just a fact. With a significant down-payment and great credit you might find a private lender willing to take a chance on you, and be compensated for the risk with a higher than market interest rate. But you still have to PROVEan ability to repay, and therein lies the rub.

I sincerely hope you overcome the odds - and of course you have Carguy's number.

I got excellent insight and advice from Carguy when I bought my last home.

bludroptop I don't know where you got your info but it's correct in some ways and fundamentally flawed in it's conclusions. And BTW I've been both Broker & Banker as well as working for one of the Big Banks.

Requiring tax returns pulled directly from IRS is a direct result of the Dodd-Frank Act. The Dodd-Frank Act does go line by line as to how to process a loan or the exact loan guidelines for every loan type, but every new loan regulation is a direct result of it. And unless you are getting a non-standard loan you won't find any lender or secondary market (and that includes Fannie) that doesn't require it. As you said, you now have to prove up the income and the IRS tax return is the only way so far that any lender has been able to stay out of the CFPB's cross hairs.

Here's the big issue with it, not that it's required, but that no one pulls them from IRS until the last second due to cost. In other words they only pull it on the loans they know should close. If they find ANY variance then that person's loan closing is stopped and the file has to go back through underwriting. We've never had one loan pulled because we get a copy of the tax returns at loan application so that we can be sure our numbers match, but I get a lot of loans where other lenders pull the approval and people get so mad that they missed this very basic step that they change lenders.

As a matter of fact a lot of our loans have already been turned down by at least one other lender and yet we still approve over 95%. We've only had one (1) turndown this whole year and it was due to the Buyer getting laid off from their job and yet just over 50% of our loans have already been turned down by other lenders. That tells me they shouldn't have been turned down in the first place.

Now when you add the Banking Regulations on top of Dodd-Frank you can see why the big banks have been the big losers in the origination department. Their costs are higher which translates into higher closing costs and usually higher rates and higher turn down rates.

Oh, and the mortgage meltdown could be called the perfect storm. It began and was mostly attributable to Mr. Clinton with his requiring lenders to do the Liar Loans and then there was the little thing called Glass Stegeall act finagling.

It wasn't the banks that caused that loan type it was the government messing with very prudent Fannie & Freddie guidelines in the interest of garnering votes. That's really the only big issue with Fannie & Freddie, the fact that the government can cause them to do non-prudent things. As a matter of fact if it weren't for Fannie & Freddie most of you would have no chance of ever owning a home.

A lot of the mortgage meltdown wasn't actually anything to do with the mortgages themselves. And if you'll remember the rest of the world had been in a recession long before us and we'd refused to enter until the election rhetoric began. And just like this time the claims were wild and started what amounts to a run on a bank.

In reply to carguy123:

Aside from the political rant, am I pretty much screwed at the moment or is there another path for me to take?

I didn't do this type of job before, so that doesn't cover the two previous years of required tax returns.

It's also making things difficult it seems because this is a rent-to-own situation.