I sold a business in 2020 and lived off the savings while working on a startup that didn’t generate any income in 2021, 2022, or 2023. This year, my startup turned a profit, and I made around $500,000.
I applied for a mortgage with Chase but was denied due to insufficient recent work history. I also tried a bank statement loan but was told they require at least two years of consistent deposits, while I’ve only been making deposits for the past four months.
I’m looking to buy a $600,000 house and putting $400,000 down, only needing a $200,000 loan, yet no one is approving me. I find this frustrating.
Reilly said:
It’s interesting that you’re surprised no one will approve you despite only having income for one of the last four years.
Doesn’t 80% down make it less risky?
Would you lend $200k to someone with only one year of income in four years? Banks want consistent income to ensure repayment.
That said, there are specialized lenders who can accommodate unusual circumstances. These programs aren’t standard and usually come with higher rates or fees.
@Lyle
I’d lend it in a heartbeat if I were in the business. Even if they defaulted, the bank would recover most of the value. Are there any banks with standard rates that might approve this?
Has anyone reviewed your business tax returns (Schedule C or S-corp) to qualify you? Many people expense heavily and show little profit, but since you’re only asking for $200k, it might work.
Some lenders accept just one year of business tax returns. If 2024 has been great for you, it might be worth waiting until you file your taxes to apply.
From the IRS and lender perspective, you don’t officially have income until you file your 2024 taxes. You could find a private lender, but it’ll come with points and a higher interest rate.