I’m looking to see if there are any lenders on here that would qualify a refinance with 1 year of business income? I started a contracting business in 2020 and wanted to refi my primary residence to buy another rental. Mostly every bank I’ve talked to requires at least 2.
I’m aware of other options such as private money and bank statement loans. But, I wanted to try to take advantage of the low interest rates while available.
Seems like I’m searching for a black swan, but figure it’s worth a try!
@Michael Macaluso You are likely best to wait it out. You might get lucky and find something. However you will need to factor in the lost opportunity cost of losing out on 1 year of deals and growth. The private money I have access to is only for investment properties. I woulden't be able to help with a HELOC on your principle residence. If flipping is a part of your path and assuming you have a down payment and LLC etc. Why not flip 1-3 houses this year with private money while you wait. Then go back and get a HELOC or refi your principle residense? Heck you could even put more money down on it and have an even lower payment by using your flipping profits. Just a thought.
@Michael Macaluso if you were in the same line prior as W2; and you can document 12 months of S/E in 2020 on your latest tax return (2020), and the income is inline or greater than what your earned before as W2 then you have a chance to be eligible for conventional financing.
Note-key though is 12 full calendar months in 2020 of being s/e. That means if you started the business in Jan, then you could make a case to your lender that you are working with, but if you started the business mid-year, well, you will just need to wait 9 more months if you’re looking to get conventional financing. Take the opportunity to save as much money. Payoff debts. File next year for 2021; and boom you will be golden :-)!
Yes, there are commercial lenders that only require one year of income and are asset based only so the property income is not part of the equation. What's important is a credit score of 700 and past experience. These commercial loan are fixed term and fully amortized and widely available in the capital markets. My firm handles a lot of these.