Newly Self-employed - Can I get a mortgage loan?

Question

Looking to refinance my current home and buy a new home, so that I can rent out my current one. (Do some house hacking.) But mortgage lenders are telling me that I need 24 months of self employment history to qualify for a loan!

I left my full-time, W-2 job in August to go full-time with my internet marketing (SEO) freelancing business. Technically my LLC started in April, and I've been making at least $3k/month with my freelancing since January. (Although I did not have the actual business "filed" until April.) Now my income is around $12,000 per month, and growing.

Goals are this: bought my current/first home last November/13 months ago with a 30-year fixed at 3.75% interest. Would like to refinance below 3% if possible, given the current rates.

Also, my wife and I would like to do some house hacking. Basically buy a new home at 5% down to live in, and rent out this one. In my market in the Salt Lake City, Utah area, homes are appreciating fast! And my current payment could be covered by rental income.

I have 760+ FICO scores and a low 6-figure income. Have been in the same line of work for 6 years, and have plenty of money saved, about $30,000. Wouldn't this make me a good risk, to the right lender? The whole reason that I left my job was to make more money, and I have been successful in that so far.

Would appreciate your help with this! I've heard that mortgage lenders who do their own underwriting might be able to work with me. Would love more insight into something like that.

Thanks in advance!

Martin Carstens · Answer

Garit, you answered your own question,

"Wouldn't this make me a good risk, to the right lender?" Of course it would! First of all. Remind yourself. This is a good problem to have! At the moment, there are many sad problems! Second. Do NOT take no for an answer! The lender is out there. You just have to find them. A mountain of paper work, yes. Time consuming & repetitive, yes. A royal pain, yes! However with a dozen no's. You only need one yes. I could not tell you how many times, I have been turned down. And then someone looks at the exact same information, and says yes! You can do it! Good luck!

Jordan Christensen · Answer

Well, guess who’s gonna give them another call. I’ll let you know how it goes!

Cameron Brunt · Answer

it never even came up with my mortgage company, they didn't care about my job or income. but technically i only had a month or so. I was a previous client and had my loan in good standing for the last 4 years. So they were willing to do a streamline refinance just to keep my business. they had been hitting me up via email and Direct mail, when they called me I decided to do it.

Cameron Brunt · Answer

it never even came up with my mortgage company, they didn't care about my job or income. but technically i only had a month or so. I was a previous client and had my loan in good standing for the last 4 years. So they were willing to do a streamline refinance just to keep my business. they had been hitting me up via email and Direct mail, when they called me I decided to do it.

Jordan Christensen · Answer

@Cameron Brunt

Really?? How long were your self employed at the time you refi’d?

My mortgage is with Freedom as well. I’ve been self employed since last July, but have kept hitting road blocks when trying to refi. One of the customer service reps told me about the streamlined option and I got stoked, but when I finally spoke with them, they still couldn’t because I didn’t have two years. Really odd.

Cameron Brunt · Answer

Yep, the joys of living the self employed life. I got lucky and my lender was offering a streamline refinance where they didn't pull my credit, check to see if i qualify, and they even covered closing costs. So i was able to do a refinance for free since i was already a current customer with them. That was with freedom mortgage, i'm not sure if they are still doing something like that, or even if your mortgage owner would do something like that.

Your next best option is to find a cosigner and do a JV with them to where they get 50 or 25% of the property.

Sam Abazari · Answer

Hi Garit,

I'm a conventional lender in Chicago. It's true that you need to file 2 years of taxes with the self-employed income for it to be considered for your purchase and refinance. Also keep in mind that the average of past 2 years will be used to consider your income.
Is your wife working and can go on the loan? That can be an option.

Happy to chat more and answer any questions, feel free to DM me.

Newly Self-employed - Can I get a mortgage loan?

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