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Getting a loan when you're self-employed in Illinois

My husband is self-employed and now we can only use our taxes to prove our income. The amount we can "prove" isn't a true picture of our finances. He has a high credit score of 792 and we have 3.5% to put down. We are looking into Illinois programs like Finally Home (where the Illinois treasury guarantees 10% of the loan for 5 years). Our DTI is about 65/65, too high (we have no other debts or monthly payments though). Any other federal or Illinois programs that I've missed? It's so hard now that no doc, stated income and low doc loans are no longer available. by CheerfulHome from Elgin, Illinois. Apr 20th 2013 Reply


Ray Hazucka (r.hazucka@mybbmc.com)
#65 ranked lender in Illinois - 36 contributions

What type of business is it? Is there any depreciation on your tax returns to be added back? I would need to see your 1040's to makesure that your income is being calculated correctly first. Ray Hazucka

Apr 21st 2013
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James Mazzola (Mazzola)
#110 ranked lender in New Jersey - 313 contributions

A few years ago, the Guidelines were changed to make future home buyers provide accurate income to obtain a mortgage. Re-due you prior tax returns to show real income to qualify.

Apr 21st 2013
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Joe Metzler (JoeMetzler)
#18 ranked lender in Minnesota - 3,727 contributions

Well... tax returns ARE a true picture of your reported income to the IRS. When self-employed, there is no other way to document your income, other than what you report to the IRS. If your ratios are that high, there is little that can be done in the traditional loan world other than to buy a significantly cheaper home, or to report more income. On the other hand, you may have luck in buying with a contract-for-deed, or finding a hard money private lender. Good luck

Apr 21st 2013
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Dave Metsker (DaveMetsker)
#37 ranked lender in Oregon - 2,317 contributions

Avoid an amended tax return. You could owe back taxes, plus penalty and interest charges. Look for a home that offers owner finance or seller carried terms. You can talk to a seller, and show them your bank statements as proof of income.

Apr 21st 2013
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Carlos Figueira (carlosfigueira)
#108 ranked lender in New Jersey - 198 contributions

Dave is correct....not to mention MOST lenders will not accept an ammeded return for the purpose of reporting higher income to qualify on for a mortgage. Your options are.....You need to go NIV (requires 40% down), look for owner financing or report accurate earnnings on next years returns and we can average both years to get you to qualify.

Apr 21st 2013
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Barb Lanis (BarbLanis)
#70 ranked lender in Illinois - 663 contributions

There are no Illinois programs available that can overcome ratios that are too high. There are great Illinois programs that provide down payment assistance and other guarantees like you mentioned. I would recommend having a lender analyze your tax return to make certain that all income available can be used. For example, there may be some deductions (i.e. depreciation) that are non-cash expenses which can be added back and used in income calcs. If you would like me to look at the scenario, I would be pleased to give you an opinion. barb.lanis@1amllc.com 1st Advantage Mortgage, located in Lombard, Schaumburg, Chicago, Northfield.

Apr 21st 2013
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Joe Shamie (Joe Shamie)
#4 ranked lender in New Jersey - 1,412 contributions

You need to show more income on future returns.

Apr 22nd 2013
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