Interesting thoughts. I guess the real answer here is it is tough for anyone right now.

My husband is a general contractor and I a real estate broker. We have been self employed since 1981. It has been difficult for us to qualify for loans at times in the past even though we have excellent credit. We are currently in process of refinancing into a 20 yr fixed at 5% loan with a local credit union. They looked at our credit and in about 5 minutes gave us an ok. Also, the only fees are basically the appraisal and title insurance. We have never been able to get this good a rate before. I would suggest to self employed borrowers, check at your local credit unions, they may be able to help you.

Thanks for your thoughts. I agree with Amy. If a lender portfolios their own stuff as a credit union would, they may be able to help. A self-employed borrower with great credit, assets and low loan-to-value will get automatically approved by FNMA DU almost every time. Although it's tough for self-employed borrowers right now, if they can document their income (and many can) they can still get a loan. And I predict the underwriting guidelines will ease. It's an opportunity for the lender and I expect they'll sense that sometime next year. Take care.

Paul

I agree on the Credit Unions, There are a couple of loans out there that are still low doc. However these loans usually require a 70/30 LTV or better and a FICO score above 700 so cash and credit are a must. Just look around and you'll find them. I beleive ING is still doing no dock with the above criteria and as a 5 year ARM.

I think if all SE buyers filed there true income then they wouldn't complain about the down fall of the "Stated Income Loan".  You see there needs to be a difference between the Full Doc and Stated Income loan with the LTV and Rates.  Your not providing the same documentation as some one with a Full Doc loan and the Lenders Rates and LTV's are determined by the risk of each loan.  Less documents means Higher Risks and you really can't expect the same loan as someone who reports and files all income to the IRS as a loan with little or no documentation...  I know that you would like to get the same rate and Down Payment as a Full Doc loan but it is not fair for everyone else who is doing the right thing (Filing true Income)...  The only way is to prove your income and file more in your tax returns......  I hope that this sheds a little light on how Banks and Lender see things.....

Boy - us mortgage folk here in Maryland have not forgotten about self employed borrowers. But thanks to our great state leaders, there is nothing we can really do. If you haven't heard -  STATED income loans in Maryland are now ILLEGAL.

Wonder what happens when a politician who can't prove their income gets denied a loan??

Frank, interesting perspective.  I agree with you on the guys who make $100,000 but only show $10k but I think that there needs to be a compromise somewhere.  Buying anything self employed is like partaking in a prostate exam.  It's almost worth the hassle to just pay cash for everything. 

Lewis, How's O'Malley working out for you guys?  We escaped before the Campaign to Tax Your Sorry Butts took office but I hear from clients all the time that it has become a utopia - a new Athens if you well.  I'm not supried they ruled against stated income there as they did the same here.  Some lenders have developed loophole programs but they require 10-20% down and pretty high credit scores. 

Hey, do you think he'll take any flack over the HBO special in the city he was mayor of that is among the worst performing in the country?  Naaa...he'll just blame George Bush, state republicans, and why not...Bob Ehrlich and Michael Steele.