I had a borrower that was employed for many years as a W2 employee but transitioned to a 1099 independent contractor and/or self employed status working with the same company. This created a major problem as the borrower was self employed for only 6 months and the mortgage guidelines call for a 2 year history of self employment income.

My first step was to find out what the borrowers assets consisted of. The borrower had an investment account that I felt would do what was needed to help me close this loan. With the borrowers permission, I contacted the investment account representative and had her develop a monthly automatic withdrawal agreement for a specific dollar amount that would put the borrowers Debt to Income Ratios at an acceptable level for loan approval. The investment account had to have enough money in it so that the monthly withdrawal amount we needed could continue for a 36 month period after the closing.

If you have a borrower that is self employed and their adjusted gross income is not enough to qualify them or perhaps they are recently self employed and their income cannot be used to qualify, I have a legitimate option to consider. Terry Traylor 713 705 1244.

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  • Marcus B.

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