Cash-Out Refinancing: Difficult for the Self-Employed?

Question

After I've owned my first rental for a year, I hope to cash-out refinance the property (rental not purchased yet; still in analysis phase).

But I recently (read online) that cash-out refi's are difficult for the self-employed.

Have any of you found this to be the case?

Through my research on BP, I learned that its harder for the self-employed to get conventional loans (later on, my experience getting  pre-approved for a conventional loan confirmed this)...

As a self-employed investor, is it just as hard to get a cash-out refi as it is to get qualified for a conventional loan? Or, is it harder than?

If it's just as difficult, then I should be in a good position as long as my business maintains its revenue in 2019... But if its more difficult, then I need to research how and what I need to start to doing to prepare myself for approval of the cash-out...

Noureen A S. · Answer

@Eric Veronica I understand. Thank you!!!

Eric Veronica · Answer

@Noureen  A S. not much difference when qualifying for a purchase mortgage or a cash out refinance mortgage

Qualifying for a mortgage as a self-employed person is hard if you don’t claim income or if you are working with a loan officer who isn’t familiar with tax returns. I speak with self employed clients all the time who have been declined by other lender before even providing all the necessary documentation.

There are certain non cash deductions on a schedule c or a schedule e tax return that can be added back such as depreciation, amortization, one-time expenses, business mileage, and others.