How can I get a mortgage who changed from W2 to self employed

[William Behring]

I am a real estate agent.  I have a client who has changed from W2 to self employed.  How can I find her a mortgage without the 2 year aging.  She is willing to pay a higher interest rate for 2 years.  She has 700+ credit and 20% down.  

[Matthew Rogers]

When I was a loan officer this is something I ran into very often. Here are the three ways that worked best for me.

1. Add a co-borrower to the loan. Ask if she has any family or friends with a good income and low debt that may be open to being on the loan. She can then refinance after the two years of being self employed and remove co-borrower.

2. Ask if she has large amounts of money in retirement accounts or other investments/assets. There is something called asset dissipation where you're able to use your assets to qualify for a loan even if they don't produce income. This can be tricky, challenging and almost every underwriter you speak with will start off by saying it's not possible. But if you're persistent and ask for their policy you may be able to find a way to make it work. It's not that it's impossible, it's just that underwriter's don't like the risk involved so they always try to shoot it down anyway possible.

3. Find someone else that will buy the house all together and she signs an owner carry back with a balloon payment for two years. She refinances and pays off balloon.

I'm not telling you how to do your job or to not help people. But if you have ten other clients waiting in line I personally wouldn't wast the time trying to get this to go through. You'll  be better off pointing her in the right direction and letting her do the leg work. It's not going to be an easy process. But if you have a slow pipeline this may be something you can chase.

Good luck