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My client doesn't receive a paycheck...how can we get financing?

By
Mortgage and Lending with Golden Pacific Bank 769327

..."My client also is self employed and his/her company shows a loss, there is no depreciation to add back in, the meals and entertainment expesnes are high and they don't work out their home" This is not starting to sound good!

For most lenders this is starting to paint a picture of a loan that might be heading down the wrong road. 

My suggestion: Reach out to smaller community bank that has a portfolio product of some sort.

Here is a list of some of the additional methods to help qualify for financing that may be utilized for an income source(not all community banks are alike). These are great questions to get in the habit of asking, they may help save your deal:

  • Shareholder loan repayment (corporate owners)
  • Draw from an asset
  • Asset Dissipation
  • Future income
  • Current rental income versus tax returns(25% vacancy factor)
  • Identifying "one-time" expenses that can be backed out

For community banks that have a portfolio product the underwriting is still considered an"art" although, while a masterpiece takes some time to produce you can probably expect additional time as these loans may need to get a loan committee or board of directors approval in order to finalize the process. It certainly is refreshing to see good loans for good borrowers still get done. 

I would happy to provide some additional insight on how to identify which community bank may be right for your situation. 

Feel free to call or email me. 

 

 

Comments (3)

Trisha Bush-LeFore
Preferred Properties Land & Homes - Walla Walla, WA
Providing Realtor Services in the Walla Walla Area

Aaron,

Great information on creative financing. We often have clients with unique situations, this post is very helpful. Thanks.

Sep 04, 2013 06:55 AM
Kathi Cline
Palm Desert, CA
Coachella Valley's Real Estate Professional

Thanks for providing some alternative ways to work things out with our clients and their financing!

Sep 04, 2013 07:14 AM
Aaron Meilich
Golden Pacific Bank - Sacramento, CA
Aaron Meilich

Trisha/Kathi, Thanks for the comments. Hope it helps you close a deal! 

Sep 04, 2013 08:49 AM