any mortgage guys here?

08rookie · 10-11-2011, 08:17 PM

construction worker makes 42k a year. shopping for a small mortgage in the 130-150k range.

he wants to use his trucks and vans to start his own, own the side, transport business. he decides to start his own LLC and moonlight as a courier of cargo....completely separate and independent of his construction gig's W2 earnings.

when he shops for a mortgage, does he need to legally disclose the LLC that he started even though he has no plans to use the LLC earnings for borrowing power? (it hasnt generated much of any business yet)

underwriter said that if you own a business you need to show 2 years of earnings before you apply for a mortgage. i can understand that, however, what if you are applying for a mortgage based solely on your W2 earnings through your construction company?? would the act of starting your own home based gig on the side really prevent you from applying for a mortgage for two years???

Bumer · 10-11-2011, 11:41 PM

Construction worker is smart

Mortgage underwriters are farking stupid.

That being said, here is the thing (and other members correct me if I'm wrong):

Depending when the LLC started, you might, or might not have an issue with it. First of all they will ask for copy of last filed personal tax return, which by now would be 2010.

If, LLC was organized during 2010, and income / loss was reported on 2010 return, then mortgage underwriters will ask you for more info. Depending on how small their brain is that could or could not be an issue. Even if W-2 income is sufficient to qualify for mortgage, they might give hard time because in their script it says to "run formulas for two years of income" on Schedule C or K-1 Income.

If, LLC was organized during 2011, smart construction worker does not even have to mention his LLC, as it has not yet been reported on "last filed income tax return".

Good luck with your LLC!

johanness · 10-12-2011, 04:39 AM

If he's not using the income of the LLC to qualify for the mortgage, then it's a moot point. Use the construction income to debt-service and be done with it.

Quick6EF · 10-12-2011, 06:55 AM

I wouldnt see any issue unless DTI is out of range and you need to report more income.

10-11-2011, 08:17 PM	#1
08rookie Private First Class 192 Rep 123 Posts Drives: bmw Join Date: Jul 2009 Location: phila, pa iTrader: (0)	any mortgage guys here? construction worker makes 42k a year. shopping for a small mortgage in the 130-150k range. he wants to use his trucks and vans to start his own, own the side, transport business. he decides to start his own LLC and moonlight as a courier of cargo....completely separate and independent of his construction gig's W2 earnings. when he shops for a mortgage, does he need to legally disclose the LLC that he started even though he has no plans to use the LLC earnings for borrowing power? (it hasnt generated much of any business yet) underwriter said that if you own a business you need to show 2 years of earnings before you apply for a mortgage. i can understand that, however, what if you are applying for a mortgage based solely on your W2 earnings through your construction company?? would the act of starting your own home based gig on the side really prevent you from applying for a mortgage for two years???
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10-11-2011, 11:41 PM	#2
Bumer Comrade Vlad 17 Rep 212 Posts Drives: 1999 M3, 2006 325i Join Date: Aug 2011 Location: Connecticut iTrader: (1) Garage List 1999 BMW M3 [9.00] 2006 BMW 325i [10.00]	Construction worker is smart Mortgage underwriters are farking stupid. That being said, here is the thing (and other members correct me if I'm wrong): Depending when the LLC started, you might, or might not have an issue with it. First of all they will ask for copy of last filed personal tax return, which by now would be 2010. If, LLC was organized during 2010, and income / loss was reported on 2010 return, then mortgage underwriters will ask you for more info. Depending on how small their brain is that could or could not be an issue. Even if W-2 income is sufficient to qualify for mortgage, they might give hard time because in their script it says to "run formulas for two years of income" on Schedule C or K-1 Income. If, LLC was organized during 2011, smart construction worker does not even have to mention his LLC, as it has not yet been reported on "last filed income tax return". Good luck with your LLC! __________________ 1999 E36 ///M3 Convertible MT Silver / Silver (99.99% stock) 2006 E90 325i
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10-12-2011, 04:39 AM	#3
johanness Banned 56 Rep 1,739 Posts Drives: 2008 Z4MC Join Date: Aug 2010 Location: Seattle, Vancouver iTrader: (3) Garage List 2008 BMW Z4M COUPE [7.00] 2012 BMW X1 xDrive 28i [9.00]	If he's not using the income of the LLC to qualify for the mortgage, then it's a moot point. Use the construction income to debt-service and be done with it.
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10-12-2011, 06:55 AM	#4
Quick6EF Lieutenant 93 Rep 489 Posts Drives: E92 Space Gray Join Date: Apr 2010 Location: Boston iTrader: (0)	I wouldnt see any issue unless DTI is out of range and you need to report more income. __________________
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