I began this whole mortgage saga at the begining of February using a mortgage banker that doesn’t sell its loans, and hope this post will help others.
I am self employed (sole proprietor, no 1099’s) and have been since about 2006.
Some of the issues that came up:
1 – Once pre-approved, my lender reccomended a realtor and sent me to find a home before I received a pre-approval letter. Once I found the home, I was sent the letter and made my offer. This is counter intuitive to much that is read online, but this is how the lender I used operates.
2 – The seller had an underage child on the title (through gift deed), so I had to wait while a judge signed paperwork to allow the sale to go through (which took about 4 months).
3 – – I have a judgement on my credit report. I had already read the FHA requirements for this, so had set up a payment plan that allowed me to have 4 months proof of payments before I started the mortgage process.
4 – My new tax bill. Due to the IRS system not updating soon enough and sending me paperwork through the mail, the only proof of an IRS payment plan was what I printed from my online payment agreement that I signed up for. This was accepted.
5 — Proof of business. My business is not required to file for a business license, but my lender needed this. In my state, I was able to have this in one day.
6- – Reserves. While not required, this was due to my lender having to go back and correct his calculations on what was neccessary to get me the home. I found out that this mortgage banker allowed unseasoned deposits under 300 dollars. So I was able to make multiple deposits for the reserves and print out my bank statement the next day to send to the underwriter.
7 – Verification of rent. I was lucky enough to not be paying any rent, and a simple letter signed by the relative I lived with was good enough.
8 – Student loans. In deferment until 2017, so were not calculated in my DTI. However, 2 of my student loans on my credit report were sold/transferred in the middle of this process (and still haven’t reappeared), changing my report/score. My lender just verified this with the servicer, and I was never asked about this.
It was a long and trying process, but doing a lot of reading online helped me to get to where I am now. Hopefully this post will help others with similar circumstances looking to get an FHA loan.