Mortgage for Self Employed

ekaetz · Joined: 06 Nov 2009 Posts: 1 1.38 Dollars($)

I have been a contract engineer for 3 years. The first 2 years I have worked through another company and was a W2 employee to them. I went independent on 1/1/2009. I am still earning the same good pay (even better now) buy am a 1099 employee to the contract company which makes me self employed. I earn good income and have excellent credit. We own a home that is 80% paid off. My wife does not work. We have no debt except our first mortgage. All credit card balances are $0. We have > 100K in investments.

We want to purchase a new home - one that is in our perfect location and went for sale last week.

I was turned down for a mortgage since I am self employed < 1 year. These are Fanny Mae and Freddy Mack new policies.

Is there any organization that I can go to for a mortgage?

jveenstra · Posted: Fri Nov 06, 2009 10:37 am Post subject: Self Employed

The policies with Fannie Mae and Freddie Mac regarding self employed borrowers is not NEW. The policies have always existed.

Their policy on an exception basis is a minimum of one year being self employed. The normal policy is to be self employed two full years and average the last 24 months income after expenses.

The exception for being self employed a minimum of 12 months can be ok sometimes if employed in the same line of work as before and making same income or higher and then they look at the total picture--credit history and scores and liquid assets, size of down payment, money left after closing etc.

While mortgage processing and underwriting are certainly tougher/stricter than they were two years ago, it may be possible when you pass the 12 month mark.

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