Can't get a mortgage

[RianMerino]

Me and my spouse are both self-employed but we want to move into a bigger home. Unfortunately, since the housing market and banks collapsed, we can't get a mortgage anymore. It doesn't matter that we have paid every single payment on our current mortgage on time for the last 15 years or that we have both paid off vehicles in the last 5-10 years. Our monthly bills are all paid on time as well. It seems that people like us would be the ones banks would want to lend to.

 

[Victor]

I'm sorry; that really sucks. It sounds like your credit is probably good but perhaps being self-employed is the issue. How many places have you tried? Lending Tree might be good if you want to check some more out.

 

[CHenne]

That stinks for sure! I can't believe that there is not a bank out there that is willing to take a chance. It's not a bad thing to be self-employed. How is your credit score?

 

[Don]

Unless you are getting paid under the table or have a truly bad credit score, you should be able to show your tax records for a number of years back and qualify that way. If neither of these is an issue, you just haven't found the right bank yet.

 

[Christian]

That really stinks but don't give up. Keep trying different banks, and you could also look for a house that is a lease purchase or owner financed.

 

[BigPapa]

I know that with the tougher restrictions, banks are really tightening up on loans. If you are self-employed you will probably have a hard time because you are trying to get a no doc or limited doc loan.

 

[Justadad]

The situation is bad here in the UK as well. The banks are just afraid to lend. Apart from that, self employed people always have more difficulty. My daughter runs a business but can't even rent a property without someone to guarantee her to the tune of £25000!

 

[RianMerino]

Don, it is a no doc loan because even though you can show your tax records, they aren't proof that you have current income or regular income. We have been to several banks and it is the same story everywhere.

 

[Don]

Don, it is a no doc loan because even though you can show your tax records, they aren't proof that you have current income or regular income. We have been to several banks and it is the same story everywhere.

You might have to initially look at an unconventional loan then. I read about a place that is in California that uses private investors to finance loans for those kind of investments. I think the interest is a little higher, but then you can refinance in a couple of years and get the lower interest rate.

 

[Andersson]

Is it possible you can go through a bank to get a FHA203k loan? Those normally work for first time buyers who are looking to get a place and fix it up to add more value to the property. I would try with Bank of America since I always tend to hear good things about them and this type of specific loan.They might be able to work out a good deal for you.

 

[Mel]

I guess it is all about risk. The financial history would seem to be in your favor, but being self-employed is viewed as a very big risk by banks.