Self-Employed First Time Homebuyers

Background

After four years of guidance from the Vantage team, they were finally ready to make their move. They had a substantial amount of savings including investments in bitcoin. Cynthia has been a nurse for over a decade and Juan has been self-employed for over five years, owning several different businesses. As is the nature of self-employment, Juan typically writes off his income as a business owner. However, this creates problems when it comes to qualifying for conventional loans. Two sets of documented taxable income is required and unfortunately, they were unable to qualify for conventional financing with anyone else due to their tax returns.

Client Requirements

After reviewing their bank statements, Vantage guided them towards the simpler process of a profit and loss loan program instead. Now the bank only needed a year to date profit and loss from the husband while utilizing the wife’s W-2 income to qualify. In addition, Juan and Cynthia requested a 2% credit buy down.

Loan Challenges

Vantage acted as both the real estate agent and mortgage lender. As the real estate agent, Vantage was able to get the seller to accept their offer with a 2% credit buy down and a $20K below asking price. After inspection revealed potential mold issues, Vantage was able to negotiate an additional $15K credit for repairs. In terms of the loan, the challenge was locating a program that matched the interest rate that was needed for them to qualify for that house. Vantage tackled this by gathering all the bank statements together and reviewing the documents for accuracy. Through this process, Vantage identified that the biggest hurdle to their success were the write-offs from the husband’s businesses that hurt their income requirements to qualify for the loan.

Solution

Vantage was able to find a loan program that allowed them to use both incomes without presenting tax returns for the husband. Since he made a substantial amount of income, Vantage was able to use a profit and loss provided by Juan’s CPA in order to reach the income requirements for this house. 

The Results

Vantage got them approved and their offer was accepted. Not only was Vantage able to negotiate a 2% (2/1) buy down with the seller, but was able to get them a lower rate for their first year! And a $15K credit towards repairs.

The Vantage Advantage

While most lenders would deny them flat out, Vantage was able to reflect on our relationships with lenders and shop for deal to suit their needs. Vantage fought for the client’s offer with the seller to get the optimal results. Juan and Cynthia were ecstatic!