I am currently self employed and involved in a number of businesses- I find it extremely difficult to get a conventional loan.

Asked by jepsteinmobile, Burbank, CA Fri Aug 17, 2012

What solutions are available for people like me? What is the market like for lease to own? buy to own? Owner carrying original note on house etc..

Thank you for all your help.

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John Sacktig, Agent, New Jersey, NJ
Fri Aug 17, 2012
Rent to Own really does not exist. It is a thought and it rarely happens. Think about it, in hti market.. you may think that you are going to get a house at a god price, yes? Not in a rent to own situation... Why? well.. why would I seel you a house at $250k and agree for you to buy it next year at $250k and the market now went up and the house is worth $350k.. are you going to increase the purcahse price? probably not.

They exist, but they do not. Usually for people who have absolutely no way to buy a home and they overpay for the property.
2 votes
Thank you- but I have been hearing about all these home sellers who can't find enough willing buyers with mortgages, what are they doing? I find it interesting that the market we have today- that people aren't renting to own situations or lease to own..
Flag Fri Aug 17, 2012
Douglas Lagos, Agent, Los Angeles, CA
Wed Jan 16, 2013
Hi Jep,

Loan officers will require at least 2 years of tax returns. If you are self employed, copies from a CPA for the last 2 years tax returns, and current year.

You need to have a 640 or higher FICO, and have your credit clean.

You need to show proof of funds for the deposit and 2-3 months reserves, along with the past 2 months bank statements.

With all of the above, you should be able to get a loan, as long as you qualify for the purchase price, etc.

Douglas Lagos
Realtor, CHS
Coldwell Banker
Web Reference:  http://www.douglaslagos.com
0 votes
John Arendsen, Agent, Leucadia, CA
Mon Oct 1, 2012
Depends on several things. You say you're involved "in a number of businesses". That may or may not work in your favor. If you can't show 2 and in some cases more years of tax returns that would substantiate enough of a net income to meet the debt to income ratios required to satisfy the lender you are probably out of luck.

Then there's the question of an adequate down payment and you're probably looking at at least 20 to 25% down. Finally your credit would have to be steller i.e. probably over 750. I know this for a fact because as a sefl employeed businessman for the past 45 years I've often been in your shoes.
0 votes
Gita Bantwal, Agent, Jamison, PA
Sat Aug 18, 2012
I know it is difficult for self employed people to get a mortgage but talk to a mortgage broker who can talk to several lenders.
I know they will need your tax returns . If you try lease to own be careful and have an attorney to read the contract and advice you.
0 votes
Michelle Gon…, Agent, Los Alamitos, CA
Fri Aug 17, 2012
What is your credit like? I work with a lender that can do conventional with 50% down and no income verification, and a 680 credit score. Give me a call would be happy to help.
0 votes
Robert Chome…, , San Diego, CA
Fri Aug 17, 2012
You might try Craigslist there can be some owner carry and lease options there. Also sometimes on the MLS there are some sellers that will carry. If you find a house that is owned free & clear, it's worth asking the seller if they will carry. They can earn a much better % rate then they could if they took the cash on the sale of the house and put it in savings, money market or CD.
0 votes
Asya Akopyan, Agent, Glendale, CA
Fri Aug 17, 2012
Hi, in today's market very hard to find a seller who will carry the loan. Lease to buy option maybe possible in more than $1.5 million houses.
If you need loan agents call me - 818 590 3025

0 votes
Cindy Davis, Agent, San Diego, CA
Fri Aug 17, 2012
yup - as a self employed Realtor I know the problem! Loan wise there isn't much right now - unfortunately. Honestly, I have not seen much lease to own opportunities around.

There have been more buyers than sellers this season, with most homes getting multiple offers. Thus, there is less motivation on the part of sellers to do lease to own.

My best advice - get your credit score sky high and save up a substantial down payment. The higher your credit score and the higher your down payment - the better your chances of getting a loan.

Also, not all lenders are created equal. Find a good mortgage broker - one who is not tied to one institution. The more loans any given mortgage broker has access to - the greater your chances of finding the right loan program.

Good luck.
0 votes
So you are saying that the retirement, downsizing generation is getting asking prices or more? and would not be willing to owner finance a sale, in order to get a better rate of return on their money than a bank etc??
Flag Fri Aug 17, 2012
Daina Burness, Agent, Burbank, CA
Fri Aug 17, 2012
I am not sure why you are having issues getting a conventional loan. How many lenders have you spoken with and why are they saying it is difficult? Lease to own and owner financing are rare. If you want to talk about your situation feel free to call or email.
0 votes
John Juarez, Agent, Fremont, CA
Fri Aug 17, 2012
In general, if you are self-employed and you are making money, your credit is good and you have substantial assets you should be able to get a loan without too much difficulty.

If you are not making any money, that is a problem.

If your credit is poor, that is a problem.

If you do not have any assets…well…you get the picture.
0 votes
Tina Lam, Agent, San Jose, CA
Fri Aug 17, 2012
You should aim for private financing. There are a number of firms willing to market your note. It won't be cheap though. Expect to pay 9-13% rates, including the origination.

Lease to own is tough to work out and even if you find one, you're looking at close to 10% rates. Same with seller financing.

Buy to own obviously works, every time.
Web Reference:  http://www.archershomes.com
0 votes
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