Home Buying in Atlanta>Question Details

amandala81, Renter in Lawrenceville, GA

self employed trying to qualify for a mortgage

Asked by amandala81, Lawrenceville, GA Tue Dec 25, 2012

i am self employed and am trying to qualify for a mortgage.. i have tried a tradtional bank but was denied due to the deductions i take (which i thought was a good thing) is there any other off the beaten path ways for me to get my first home? i am paying 1300 in rent and tired of it lol

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I would recommend The Lenders Network. They are kind of like Lending Tree for people with various difficult situations like poor credit, self employment etc. They have a few lenders they work with, they will be able to point you in the right direction.

Good Luck!
3 votes Thank Flag Link Thu Aug 1, 2013
I would contact a local lender to sit down and talk about your loan options. Best of luck
0 votes Thank Flag Link Mon Aug 31, 2015
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0 votes Thank Flag Link Sat Aug 29, 2015
That fact that your self employed should not present a problem, as long as your credit scores and income to debt ratios are satisfactory. (My wife and I have been self employed for the past 25 years and have bought and sold more than 10 homes during this time period)

Assuming you meet general lending criteria the problem is you went to a traditional bank (Note to readers Do Not Waste Your Time speaking with the Big Banks they do not deserve your business and are the absolute worst to work with. There are many good people who work there but the institutions themselves are their own worst enemies)

I would suggest speaking either to a small local bank or Credit Union or a good mortgage broker.
Below is a link to a short article on what lenders are looking for when considering someone for a mortgage.
0 votes Thank Flag Link Sat Oct 26, 2013
A reverse mortgage is a loan that homeowners 62 years of age or older can take out against their principal residence. Instead of making monthly payments to the lender, the borrower can receive monthly payments, a lump sum payment, or a line of credit from the lender, charged against the equity in the borrower’s home. The reverse mortgage is due and payable when the borrower sells the property, permanently leaves the home, or passes away. Repayment can also be triggered if the borrower fails to maintain the property or stay current on property taxes and homeowners insurance.

0 votes Thank Flag Link Sat Oct 26, 2013
Hi Amanda,
Without reviewind the last two years of Federal Income Tax returns along wth your other financial information, there is no way anyone can properly advise you.

Lending guidelines (Fannie Mae, Freddie Mac, FHA, VA, USDA, etc) all allow for depreciation and depletion (although depletion is rarely seen) to be added back into the qualifying income. Under certain circumstances, mileage might also be able to be added back into your qualifying income. The same holds true for depreciation in rental income.

When buyers cannot qualify for a traditional mortgage, some often turn to Hard Money Lenders. Caution should be used there though. Many of those types or loans come with a much larger down payment requirement, significantly higher interest rates, and term only for a short period of time. A huge issue then arises if you are still not able to qualify for a traditional mortgage once that term has reached its maturity. You could be out your investment if you are not very careful.

The same can be said for lease purchases. I do not suggest doing lease purchases for a variety of reasons. There are simply way too many things that can go wrong with one from either side.

Getting Pre-Qualified is the only way for you to find out your options. To get Pre-Qualified for your purchase, you can submit your request online at http://www.rodneymason.com.

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of lending experience.

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing.
0 votes Thank Flag Link Wed Dec 26, 2012
There is a local lender here that I've worked with for people in your situation. They have a bank statement loan where they look at the last two years bank statements instead of your tax returns. Rates are competitive and similar to traditional loans. Feel free to email me and I'll see if we can help you out.
David Bottomley
Keller Williams Atlanta Intown
0 votes Thank Flag Link Wed Dec 26, 2012
Hi Amanda,
Theoretically the previous two answers are correct. However, you wil have to increase your tax liability for the next 2 years Home prices are at an all time low but on the rise. The house you can buy today may cost thousands more in two years. In addition, at least for now, you can claim Home Mortgage Interest as a deduction on your taxes for next two years, off-setting the higher interest rate you would have to pay a Private Lender Do the math before you make a decision

Good Luck. If I can help please contact me.
0 votes Thank Flag Link Tue Dec 25, 2012

There is no short cut, no easy path. You can look for a lender that better understands the self-employed you will still face a steeply uphill battle. You can put a larger amount down then seek secondary financing or financing on other assets like your car to recover your cash after you have a mortgage.

I know many self-employed people who limit their deductions and pay a higher tax in the 2 years prior to seeking a loan or structure they income to straddle tax years. In December 2012 you pay yourself a large bonus, in December 2013 you do that again. You file your taxes February 2014 you have 2 years to taxes showing high income.

As a self-employed person it take greater planning, strategy and documentation than if you worked for Exxon, Home Depot or IBM. As a self-employed person you have some degree of control over your continued employment working at a large firm, while it may be easy to get a loan, you can be called in the day after closing and told to empty out your desk.

It sees unfair but who said life was supposed to be fair.

Bruce Ailion,
RE/MAX Greater Atlanta
An Atlanta Real Estate Expert Serving Clients Since 1979
RE/MAX Hall of Fame – REALTOR Phoenix Award
Certified Residential Specialist
Certified Real Estate Broker
Accredited Buyers Agent
MS Real Estate and Urban Affairs
Certified Distressed Property Expert
Certified Investor Agent Specialist
Certified Internet Professional
203K Certified Specialist
2050 Roswell Road
Marietta GA 30062
404-978-2281 Direct
404-386-3682 Assistant Robin
678-760-6266 Buyer’s Agent Adam
770-973-9700 Office
0 votes Thank Flag Link Tue Dec 25, 2012
Since we are going into 2013, and you will be doing your taxes for 2012, I would call a good lender that will explain what you need to do to improve your adjustable gross. This means that you will not write off like you have in the previous years but it will improve your opportunity to purchase a home.
Again, talk to a good lender that will advise you before you do your taxes for 2012.
0 votes Thank Flag Link Tue Dec 25, 2012
Hi Amanda,
Your best bet, being self employed, is to contact a Private Lending Company. Unfortunately, most Banks and Mortgage Lenders just look at your Adjusted Gross Income. They don't take into consideration that many of your deductions like depreciation and depletion are not out-of-pocket costs.

A Private Lender will look differently at your "real" income. They also don't depend on your Credit Score. They will look at your 'real" income to determine if you are capable of repaying the loan and the Appraised value of the property against what you are able to purchase it for.
A Private Lender will require a higher down payment and a higher interest rate but will not put you through the hoops that a Bank will.

If you would consider going with a Private Lender I can recommend one that I have worked with in getting some of my non-conforming clients financed. They are licensed in the State of Georgia to make Home Mortgage Loans. Their contact information is:

The Westmoore Group, LLC
Ph: (646) 801-6190
Fx: (646) 619-4291
The Westmoore Group, LLC is a licensed lender in the State of Georgia and operates under the license #30544.
0 votes Thank Flag Link Tue Dec 25, 2012
Lending guidelines (Fannie Mae, Freddie Mac, FHA, VA, USDA, etc) all allow for depreciation to be added back into the qualifying income. The same holds true for depreciation in rental income.
Flag Wed Dec 26, 2012
I would advice to sit down with your accountant and a loan officer to steer you in the right direction. I have great lender that I work with. You may call, text or email me to further discuss your options. There may be options that will allow you to qualify in 2013 for a home. The options need to be discussed prior to you filing your taxes.

Dawn Richardson
Keller Williams Realty Peachtree Road
0 votes Thank Flag Link Tue Dec 25, 2012
Amanda -- If you have 20% to put down, and can meet a few other qualifications I might have a referral for a lender for you. Please email me if interested at Micheleatkw@gmail.com.

Michele Goddard
Keller Williams Metro Atlanta
0 votes Thank Flag Link Tue Dec 25, 2012
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