No two transactions in Real Estate are alike but one of the most difficult ones I was involved in happened when I represented a client who was self-employed. He was doing what he does professionally for more than thirty years but getting approved for a mortgage took him down the path of no, no, no, from different lenders. The worst ones were the ones who said, they can get it done but could not.
When Buyers trust their Lenders and/or Real Estate Agent who breaks their trust it feels like bull S#^! W-2 employees are business owners who make many sacrifices. If they run the business by themselves, they are the first ones in the door, and the last ones to lock up at night. They take risks. Some years are great, other years not so much. But those who persevere and do not give up easily, can remain hopeful. For Self-Employed Business owners, competition is fierce, especially for those who have a niche.
Lenders require a lot more paperwork for self-employed individuals and there is a lot to weed through sorting out business expenses. Deducting expenses can be good and it can work against you. The IRS does not make it easy on self-employed business owners. It can be tricky. When the Lender wants to see a lower loan-to-value ratio from the self-employed business owner, they also expect a hefty down payment. In a Seller's Market, it can be harder for W-2 wage earners to get a Conventional Loan. As in business: A quitter never wins, and a winner never quits.
Nobody who makes so many sacrifices, as a self-employed business owner to stay in business, wants to be perceived as a failure, someone less than credit worthy, especially if they kept their business running for 20, 30 years or more. Rejection kills hopes and dreams. When a Lender says, better luck next time, come back when you optimize this ratio and you can afford it, is like spitting in the borrower's face.
Finding the right Lender who can be upfront, right from the start, and explains things succinctly without bs to a self-employed business owner, can lead the borrower down the right path to succeed. My Buyer was lucky and Paul Cazalas from SWB Mortgage in Dallas was truthful and honest. The three of us, Lender, Borrower, and myself remain business friends and the best part is, my client paid off his loan. Successful endings are possible for Self-Employed Business Owners. Staying in relationship with people you trust makes dreams possible.
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